the essay of 7 January 2026 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"> </head> <body bgcolor="#FFFFFF"> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#663399">JANUARY 07, 2026</font></strong></font></p> <p align="center"><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong> GST and the Case of the Vanishing Silver</strong></font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><u>By Vijay Kumar</u></strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>IF</strong> bullion could file a writ, this would be it. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">GRM Jewellers, a registered GST taxpayer dealing in bullion, had 105 kgs of pure silver lumps and Rs.2,05,000 in cash seized by the police at Kurnool on 27.01.2021. Confiscation followed, with an option to pay Rs.35 lakhs in lieu. Their appeal was dismissed on 24.11.2022; the GST Tribunal wasn't yet born, so the taxpayer paid Rs.39,20,000 (tax, penalty, fine) on 21.03.2023. The GST Assistant Commissioner issued a release order to the Police - return the silver and cash. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The police replied with a plot twist: the silver and cash had been stolen-<strong>from the police station</strong>! Some quantities were recovered and placed before the Judicial Magistrate, Kurnool. On direction, the taxpayer received 81.567 kgs of silver and Rs.10 lakhs. But the original seizure was 105 kgs and Rs.2,05,000. Worse, the taxpayer contended that 54.567 kgs of the returned silver was only 60% pure. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">When compensation didn't come, the taxpayer approached the High Court seeking return of 44.123 kgs of pure silver or its market value. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The State argued that the seizure was an exercise of sovereign power, so no claim for compensation could be maintained. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>The sovereign fence claimed immunity, but is immunity impunity? </em></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The High Court reached for its constitutional toolkit: public law compensation and the doctrine of constitutional tort. It cited a line of Supreme Court decisions where compensation was awarded for State action or negligence. <strong><a href="https://taxindiaonline.com/searchcaselaw/details?id=190980&type=caselaw&keyword=null" target="_blank">2026-TIOL-46-HC-AP-GST</a></strong> </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The High Court referred to a table from the Supreme Court judgement in<em> Kaushal Kishor v. State of U.P</em> showing details of the cases where the Court awarded compensation in public law, invoking the principle of constitutional tort, either expressly or impliedly. And this is a brilliant erudite judgement written by Justice V. RAMASUBRAMANIAN and Justice B.V. NAGARATHNA. </font></p> <table align="center" border="1" cellpadding="03" cellspacing="0" style="width:90%"> <tbody> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Sl. No. </strong></font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Case Law </strong></font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Decision </strong></font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">1. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Sebastian M. Hongray v Union of India (1984) 3 SCC 82 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- Two men who were taken for questioning by 21st Sikh Regiment never returned home. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- When a writ of habeas corpus was filed by a JNU student, this Court directed that the missing men be produced before the Court. This order could not be complied with. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- Court awarded compensation of Rs 1 lakh to the wives of the missing men on account of mental agony suffered by them. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Bhim Singh v State of J&K (1985) 4 SCC 677 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- An MLA was illegally arrested and detained to prevent him from attending a session of the Jammu & Kashmir State Legislative Assembly. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- FIR was registered under Section 153-AIPC and order of remand was obtained from the Magistrate without producing the MLA before Court. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- In a writ for habeas corpus filed by his wife, this Court observed that there had been a violation of his fundamental rights under Articles 21 and 22(2) of the Constitution and accordingly directed the State of Jammu and Kashmir to pay Bhim Singh a sum of Rs 50,000 as compensation. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">3. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Peoples' Union for Democratic Rights V State of Bihar &Ors. (1987) 1 SCC 265 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- A public interest litigation was filed against the illegal shooting by police officers against members of a peaceful assembly. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- Several were injured and 21 died (including children) due to this incident. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- While the State had paid a compensation of Rs 10,000 each to heirs of the deceased, this Court found it insufficient and directed payment of Rs 20,000 to dependents of each deceased and Rs 5000 to each injured person. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">4. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Saheli, a Women's Resources Centre vs. Commissioner of Police, Delhi Police & Ors. (1990) 1 SCC 422 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- Two women were forcefully evicted from their homes. The landlord was aided by the SHO and SI in the assault that led to demise of the nine- year-old son of one of the women. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- This Court awarded compensation of Rs 75,000 to the mother of the deceased child. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">5. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Supreme Court Legal Aid Committee v. State of Bihar (1991) 3 SCC 482 </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- A person injured in a train robbery, was taken to the nearest hospital by the police by tying him to the footboard of a vehicle. This led to his death. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- This Court observed that had timely care been given to the victim he might have been saved. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- The State of Bihar was directed to pay Rs 20,000 to the legal heirs of the deceased. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Nilabati Behera v State of Orissa (1993) 2 SCC 746 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- Petitioner was a mother whose son had died in police custody. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- This Court directed the State to pay compensation of Rs 1.5 lakhs. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">7. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Arvinder Singh Bagga V State of U.P. (1994) 6 SCC 565 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- A married woman was detained and physically assaulted in a police station with a view to coerce her to implicate her husband and his family in a case of abduction and forcible marriage. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- After taking her statement, her husband and his family were also harassed by the police. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- This Court observed that the police had exhibited high-handedness and uncivilised behaviour and awarded the woman a compensation of Rs 10,000 and members of her family Rs 5000 each. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">8. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">N. Nagendra Rao & Co. V State of A.P. (1994) 6 SCC 205 </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- Appellant was in the business of food grains and fertiliser. On an inspection by the authorities concerned, his stocks were seized. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- As was the practice, the food grains in custody were sold and the proceeds deposited in the Treasury, but the fertilisers were not dealt with in the same manner causing great loss to the petitioner. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- In a suit for negligence and misfeasance of public authorities, this Court further developed the concept of constitutional tort and limited the scope of sovereign immunity laid down in <em>Kasturi Lal [Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039]</em>. The State was held vicariously liable for the actions of the authorities. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">9. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Inder Singh V State of Punjab (1995) 3 SCC 702 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- A Deputy Superintendent of Police along with his subordinates abducted and killed seven persons due to personal vengeance. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- This Court ordered an inquiry by CBI. After CBI filed a report, this Court directed the State to pay Rs 1.5 lakhs to the legal heirs (to be recovered from guilty policemen later) and State to pay costs quantified at Rs 25,000. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">10. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Paschim Banga Khet Mazdoor Samity V State of W.B. 1996) 4 SCC 37] </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- The callous attitude on the part of the medical authorities at various Government-run hospitals in Calcutta in providing treatment to a train accident victim was highlighted in this case. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- This Court directed the State to pay Rs 25,000 for the denial of its constitutional obligations of care. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">11. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">D.K. Basu v State of W.B. (1997) 1 SCC 416 </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- In a public interest litigation involving incidents of custodial violence in West Bengal, this Court issued guidelines for law enforcement agencies to follow when arresting and detaining any person. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- This Court also discussed the award of compensation as a remedy for violation of fundamental rights as a punitive measure against State action. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">12. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">People's Union for Civil Liberties v Union of India (1997) 3 SCC 433 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- Two persons alleged to be terrorists were killed by the police in a false encounter. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- This Court directed the State of Manipur to pay Rs 1 lakh to the family of the deceased and Rs 10,000 to PUCL for pursuing the case for many years. </font></p> </td> </tr> <tr> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">13. </font></p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">Municipal Corporation of Delhi, Delhi Vs Uphaar Tragedy Victims Association & Ors. (2011) 14 SCC 481 </font></p> <p align="justify"> </p> </td> <td style="vertical-align:top"> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- A fire in a cinema hall resulted in injury to over 100 persons and death of 59 cinemagoers. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- The fire was caused by a transformer installed by Delhi Vidyut Board (DVB). </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- HC had found the Municipal Corporation, Delhi Police, and the DVB responsible for the accident. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2" style="background-color:#dff3cb">- This Court held only DVB and theatre owner liable to pay compensation in the ratio of 15: 85. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">- While doing so, this Court dealt extensively with the concept of constitutional tort. </font></p> </td> </tr> </tbody></table> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Coming back to the present case, the High Court observed: </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">1. The loss of silver can only be attributable to the negligence of the respondents as the silver was stolen from the police station itself. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. The loss of such a large amount of silver and cash would absolutely impinge on the right of the petitioner, under Article 19(1)(g) to carry on his trade or business. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">3. The petitioner is entitled to compensation for the loss suffered by him on account of the sheer negligence on the part of the officials of the State in protecting the property which has been seized. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">4. It would not be possible for this Court to go into the question of the purity of the silver, handed over to the petitioner. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">5. This Court would however leave it open to the petitioner, to demonstrate his claim that 54.567 kgs of the silver returned to him was impure silver consisting of only 60% silver with balance being made up of copper/nickel. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6. The cash of Rs. 2,05,000/- has been seized and cash of Rs 10 lakhs has been returned to the petitioner. It is stated that the aforesaid Rs 10 lakhs was the cash recovered from the persons who had stolen the silver and cash, as these persons had sold away some part of the silver and some of the proceeds of such sale, were recovered from these accused persons. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">And held </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">1. The petitioner is entitled to a return of 23.44 kgs of pure silver. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2. The value of silver, as on date, shall be taken for purposes of supply of such silver to the petitioner. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">3. The additional cash of Rs. 7,95,000/- shall be adjusted against the return of 23.44 kgs, by taking the value of Silver, as on today. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">4. The silver that remains to be given to the petitioner, after such adjustment, shall be given by the respondents, either in the form of pure silver or by payment of cash, in lieu of silver. For such purpose the value of pure silver as on today shall be taken. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">5. The aforesaid value will be applied if the silver is returned within three weeks from today. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">6. If there is any delay in the return of the silver, beyond three weeks from today, the value of pure silver, on the date of return, shall be taken. </font></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">But the mystery lingers: </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Is this the end of the story? </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><img src="https://admin.taxindiaonline.com/UploadedFiles/Customs/CaseLaws/2026/JestGST07012026.JPG" style="height:347px; width:524px"/></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Who will finally give him the cost of silver-the Police who lost it, the GST authorities who levied it, the State that claimed sovereignty, or the Centre that never birthed its Tribunal? </font></p> <p align="justify"><font color="#ff0000" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until next week </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">This judgement came on 31st December 2025 -Happy New Year. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Comments/feedback welcome at <a href="mailto:vijaywrite@tiol.in">vijaywrite@tiol.in</a> or 9848111243 (WhatsApp) </font></p> </body> </html>