Lucknow, March 20 -- : The state tax department has issued a circular reinforcing tax officials' authority to seize goods transported with undervalued invoices, following a key judgment by the Allahabad high court.

The judgment also brings to the fore the rampant practice of pan masala/gutkha manufacturing units indulging in what the court said "organised tax evasion" in U.P.

On March 3, the court dismissed multiple writ petitions from traders dealing in pan masala and scented tobacco, upholding tax officials' right to detain goods under Section 129 of the GST Act if their declared value is found to be deliberately understated.

A major factor in the ruling was a case where 3.84 lakh pouches of pan masala were declared at just Rs.69,600...