Writ Petition No. 9295 of 2025 · The High Court
Case Details
- 1 - NC: 2025:KHC:14376 WP No. 9295 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 9295 OF 2025 (T-RES) BETWEEN: 1. M/S AAIZ STEEL A PROPRIETARY CONCERN REPRESENTED HEREIN BY ITS SOLE PROPRIETOR SRI. MOHAMMED VASIF AGED ABOUT 32 YEARS S/O MUMTAZ PASHA HAVING OFFICE AT NO.09 GROUND FLOOR, SHOP NO.4, P AND T LAYOUT, 2ND STAGE 2ND PHASE, RAJEEV NAGAR MYSORE-570 019. …PETITIONER Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA (BY SRI. SANDEEP HUILGOL, ADVOCATE) AND: 1. COMMERCIAL TAX OFFICER (ENFORCEMENT), MADIKERI UGAPPA COMPLEX, KOHINOOR ROAD MADIKERI-571 201. 2. JOINT COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT), MYSORE, MYSURU ZONE MYSURU, SESHADRI BHAVAN DIWAN ROAD, MYSORE-570 024. - 2 - NC: 2025:KHC:14376 WP No. 9295 of 2025 3. JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS), MYSORE SESHADRI BHAVAN, DIWAN ROAD MYSORE-570 024. 4. POLICE INSPECTOR RURAL POLICE STATION HUNASURU, OLD BM ROAD THALASSERY-MYSORE ROAD HUNSUR, KARNATAKA-571 105. 5. UNION OF INDIA REPRESENTED HEREIN BY THE SECRETARY DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK, NEW DELHI-110 001. …RESPONDENTS
Legal Reasoning
(BY SRI. HEMA KUMAR .K, AGA FOR R1 TO R4; SRI. MADANAN PILLAI, ADVOCATE FOR R5) THIS WP IS FILED UNDER ARTICLES 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER OF DETENTION DATED 04.12.2024 BEARING NO. CTO(ENF)/MDK/VIG-12/2024-25 PASSED BY THE 1ST RESPONDENT IN FORM MOV 6 UNDER SECTION 129(1) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017, STATE GOODS AND SERVICES TAX ACT, 2017/UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017 AND SECTION 20 OF THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 (ANNEXURE A) AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - NC: 2025:KHC:14376 WP No. 9295 of 2025 CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner is seeking for the following reliefs: "i) Quashing the impugned Order of Detention dated 04.12.2024 bearing No.CTO(ENF)/MDK/VIG- 12/2024-25 passed by the 1st respondent in Form MOV 6 under Section 129(1) of the Central Goods and Services Tax Act, 2017, State Goods and Services Tax Act, 2017/Union Territory Goods and Services Tax Act, 2017 and Section 20 of the Integrated Goods and Services Tax Act, 2017 (Annexure-'A'); ii) Directing the 1st respondent and the 4th respondent to immediately effect the release of the goods to the petitioner from the premises of the Rural Police Station, Hunasuru; iii) Directing the 1st respondent and the 4th respondent to immediately effect the release of conveyance bearing No.MH-24-AU-7706 to the Petitioner from the premises of the Rural Police Station, Hunasuru; iv) Declaring that the interception, detention/seizure and confiscation of the petitioner's goods and the conveyance bearing No.MH-24-AU- 7706 by the 1st respondent and all the proceedings in - 4 - NC: 2025:KHC:14376 WP No. 9295 of 2025 respect of the same are wholly bad in law and on facts, arbitrary and unconstitutional; and v) Pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, and in the interest of justice and equity." 2. Learned counsel for the petitioner submits that the subject conveyance bearing No.MH-24-AU-7706 and subject goods may be released in favour of the petitioner by imposing terms and conditions upon the petitioner would abide and comply with the same in accordance with law. 3. In this context, learned counsel for the petitioner files a memo along with chart filed on behalf of the petitioner, which reads as under; Sl. No. 1. Description Amount
Decision
Page number in the writ petition Value of the goods as per Delivery Challan (Inclusive of CGST and SGST paid at 18% Rs.10,04,350/- 122 (Annexure-H) 2. Tax paid on the goods vide Reverse Charge Mechanism (RCM) Rs.1,53,206/- 122 (Annexure-H) - 5 - NC: 2025:KHC:14376 WP No. 9295 of 2025 Rs.3,06,412/- 122 (Annexure-H) Rs.45,29,785/- 232 (Annexure-S) Rs.2,51,088/- - Rs.7,53,263/- - 3. 4. 5. 6. Penalty under Section 129(1)(a) of the GST Act - (200% of the tax amount) in the goods Value of the determined confiscation order based on the 3rd party reports valuation (exclusive of GST) 25% of the value of the the Goods as per Delivery Challan - As per Sl. No.1 75% of the value of the Goods as per the Delivery Challan - As per Sl. No.1 4. In support of his submissions, learned counsel for the petitioner placed reliance upon the judgment of the Hon’ble Division Bench in the case of State of Karnataka and others Vs. M/s. Karthik Agencies and another – W.A.No.1464/2024 dated 23.10.2024, which reads as under: “Learned counsel for the appellants has filed I.A.No.2/2024, seeking condonation of delay of 14 days in filing the appeal. - 6 - NC: 2025:KHC:14376 WP No. 9295 of 2025 For the reasons stated in the affidavit accompanying the application, I.A.No.2/2024 is allowed. Delay of 14 days in filing the appeal is condoned. 2. With the consent of the learned counsel for the parties, the appeal is heard finally. 3. The challenge in this appeal is to the order dated 09.08.2024 passed by the learned Single Judge, as an interim measure (in W.P.No.17265/2024), wherein he has, in paragraph 6, stated as under: "In the meanwhile, by way of an interim arrangement, the respondents are directed to release the subject goods and conveyance in favour of the petitioner, immediately upon the petitioner depositing a sum of Rs.4 Lakhs with the respondents which shall be subject to the final outcome of the petition." 4. The submission of the learned counsel for the appellants is that as against the liability of sum of `22,35,932/- determined by the appellants on the respondent No.1, the learned Single Judge has only directed for the release of the goods and conveyance on deposit of an amount of `4,00,000/- with the appellants. According to him, if the appellants succeed before the learned Single Judge and the liability against the respondent No.1 is upheld, it would be very difficult for the appellants to recover the liability amount. - 7 - NC: 2025:KHC:14376 WP No. 9295 of 2025 5. On the other hand, the learned counsel appearing for the respondent No.1 would contest the liability as determined by the appellants herein on the respondent No.1. According to him, the total value of the goods is `12,83,354/-. The case of the respondent No.1 before the learned Single Judge was that the impugned action which has been taken by the appellants is in violation of Sections 129 and 130 of the Karnataka Goods and Services Act, 2017. In any case, the liability could not have been determined upon the respondent No.1 on facts. 6. Considering the order passed by the learned Single Judge and also the fact that the liability of a sum of `22,35,932/- has been determined on the respondent No.1 and also according to the learned counsel appearing for the respondent No.1 is of `12,83,354/-, we deem it appropriate to dispose of the total goods value that, the appeal by upholding the order passed by the learned Single Judge and additionally directing the respondent No.1 herein to furnish a Bank Guarantee (from a Nationalised Bank) for an amount of `8,83,354/- in favour of the Joint Commissioner of Commercial Taxes (Vigilance) and keep the same valid during the pendency of the writ petition and also furnishing a personal bond, in terms of the format to be furnished by the appellants, of Mr. Chikka Aanjibabu, Proprietor of respondent No.1, within two days to enable the appellants release the goods and conveyance in terms of the direction given by the learned Single Judge. The same shall be subject to the outcome of the writ petition. - 8 - NC: 2025:KHC:14376 WP No. 9295 of 2025 The appeal stands disposed of. In view of disposal of the appeal, I.A.No.1/2024 for stay does not survive for consideration and is disposed of accordingly.” 5. Per contra, learned AGA and learned CGC would support the impugned order and submits that there is no merit in the petition and that the same is liable to be dismissed. 6. Though several contentions have been urged by both sides in support of their respective claims, having regard to the specific submission made by the petitioner and in the facts and circumstances of the instant case and the judgment of the Hon’ble Division Bench in M/s. Karthik Agencies supra, I deem it just and appropriate to dispose of this petition by directing the respondents to release the subject conveyance and goods in favour of the petitioner by imposing certain conditions. 7. In the result, pass the following: ORDER (i) The petition is hereby disposed of. (ii) The concerned respondents are hereby directed to release subject goods as well as subject conveyance - 9 - NC: 2025:KHC:14376 WP No. 9295 of 2025 bearing No.MH-24-AU-7706 in favour of the petitioner immediately upon the petitioner depositing aforesaid 25% of the value of the goods in a sum of Rs.2,51,088/- as well as furnishing Bank Guarantee to an extent of 75% in a sum of Rs.7,53,263/- as well as executing a personal bond in relation to the remaining demand put forth by the respondents. (iii) Immediately upon the petitioner complying with the aforesaid directions, the concerned respondents shall release the subject goods and conveyance in favour of the petitioner forthwith, without any delay. Sd/- (S.R.KRISHNA KUMAR) JUDGE NBM/SV List No.: 3 Sl No.: 2