M/S Royal Steel vs. State Of Karnataka

The Petitioner is before this Court seeking for the following reliefs: i. Issue a writ, order or direction in the nature of Certiorari or any other appropriate writ, order or direction quashing the order dated 21.04.2025 bearing no. Adcom/ENF/SZ/CTO(ENF)-39/MOV- 6/No.8/2025-26, passed by the R2 under Section 129(1) of the SGST/CGST Act 2017 (Annexure-A)

The Petitioner claims to be in the business of procuring iron and metal scraps on a bulk basis from various businesses and, in turn, selling them to its customers. Insofar as subject matter of the present petition is concerned, the petitioner is stated to have HC-KAR NC: 2025:KHC:26698 purchased scrap metal to an extent of 11,910 KGs., and sold it the same to M/s A One Ispat Pvt., Ltd. as regards which the petitioner had availed the service of one M/s Royal Steel, which was being transported vide motor vehicle bearing No.KA-50-B-5819, vide invoice dated 20.04.2025 and e-way bill dated 20.04.2025. The said consignment was intercepted by Respondent No.2-Commercial Tax Officer (Enforcement) on 21.04.2025, and a verification of the documents was demanded.

A statement in Form No.MOV-01 dated 21.04.2025 was recorded and the same was subjected to physical verification of the consignment as well as a document vide Form No.MOV-02. The petitioner claims that though all the requisite documents have been submitted, Respondent without any cogent reason on the alleged ground that the documents are defective, seized the vehicle. Physical verification of the goods was conducted Form No.MOV-04 was HC-KAR NC: 2025:KHC:26698 issued and thereafter subsequent proceedings had been carried out. It is in that background, that the petitioner is before this Court seeking for the aforesaid relief.

Sri.Bharath Kumar.V., learned counsel for the petitioner would submits that;

The petitioner has furnished all the relevant documents, and the goods have been subjected to physical verification, the weight of the goods, the quality of the goods as also the nature of the goods has been found to be in terms of invoice and e-way bill. The documents being proper, the Respondents could neither have seized the vehicle nor the goods and on that ground, he submits that this Court ought to exercise its extraordinary juri iction and grant the relief sought for.

Smt.Jyoti. M. Maradi., learned HCGP would however vehemently oppose the same. HC-KAR NC: 2025:KHC:26698

Her submission is that on enquiry the petitioner had indicated that it was the services of M/s Royal World which was used for the purpose of transport. The statement of the proprietor of M/s Royal World has been recorded, who has categorically indicated that he has not entered into any transaction nor provided any service to the petitioner. The vehicle in question does not belong to M/s Royal World or the proprietor.

In that background, she submits that there are documents which have been created, which are required to be looked into, there are disputed facts which are involved in the petition is not as simple as what the learned counsel for the petitioner has indicated.

There being detailed enquiries which have been substantially carried out, neither the vehicle nor the goods can be released at this stage. HC-KAR NC: 2025:KHC:26698

She submits that the petitioner has an alternative efficacious remedy in terms of an Appeal under Section 107 of the Karnataka Goods and Services Tax Act, 2017 (KGST Act).

Heard Sri.Bharath Kumar.V., learned counsel appearing for the petitioner and Smt.Jyoti. M. Maradi., learned HCGP and produced papers.

The submission of Smt.Jyoti. M. Maradi., learned HCGP is right, inasmuch as the original file as also the statements which have been placed on record indicates a complete denial by the alleged transporter. If there is no transporter, the invoice bearing an LR number of the transporter which has not been issued by the transporter is suspect. If that were to be suspect and the transporter has not transported the goods, it is required to be ascertained as to from whose custody the goods have been seized and who was transporting the HC-KAR NC: 2025:KHC:26698 goods and whether there is any violation of the applicable laws in such an activity.

Whether taxes have been paid on the items in question as also on the transport would have to be ascertained. The petitioner claiming that it had used the services of M/s Royal World, M/s Royal World having denied providing such services. These aspects require a factual enquiry which cannot be made in a writ petition of this nature.

In that view of the matter, since adverting to any of the disputed facts could cause prejudice to either of the parties, this Court refrains from doing so and passes the following;