Sri Padmavati Energy Solutions INDIA PVT LTD vs. State Of Karnataka
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Cause title — parties, addresses and appearances
ORAL ORDER (PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR)
This petition is filed by the petitioner seeking for a writ of mandamus to quash and set aside the impugned order dated 14.05.2025 issued by respondent No.3 confiscating the goods, issuing conveyance and levying fine and penalty under Section 130 of the Karnataka Goods and Services Act/Central Goods and Services Tax Act, (hereinafter referred to as ‘the KGST/CGST Act’, for short) and for consequential relief of a mandamus for release of the confiscated goods and vehicle. HC-KAR NC: 2025:KHC-D:7363
The petitioner is a private limited company having its registered office at Telangana. The petitioner is doing the business of battery recycling since 2010 and is duly authorized by the Government of India to purchase the scrap batteries from across India. On 16.04.2025, the petitioner purchased battery scrap weighing 11,685kg valued at Rs.12,15,240/- from respondent No.4-M/s Devikrupa Enterprise bearing GSTIN:23CEFPD1393NIZG. The applicable IGST of Rs.2,18,743/- was included in the total invoice value of Rs.14,33,983/-.
The petitioner, in the normal course of business, conducted due diligence of verifying the antecedents of the supplier of the scrap and on proper verification and due diligence and after going through the official GST portal, wherein the GSTIN was active and valid, and after obtaining the GST certificate, PAN card and utility bill of respondent No.4 and being satisfied with the standard verification procedure, entered into business transaction with respondent No.
The petitioner made significant payment for the HC-KAR NC: 2025:KHC-D:7363 transaction through proper banking channels and made payment of Rs.14,05,849/-. For transportation of the purchased goods, the petitioner arranged 3rd party commercial transport vehicle bearing registration No.KA-29- D-1305. The said vehicle did not have any connection with respondent No.4 and it was solely hired by the petitioner for transportation on charges of Rs.5,000/-.
On 16.04.2025 at 8:13pm, respondent No.4 generated E-way bill for transportation of the purchased goods from Gadag, Karnataka, to the petitioner’s premises at Telangana. This being the state of affairs, at 9:15 pm on the same day, the vehicle which was carrying the purchased goods was intercepted by the officers of the commercial Tax Department near Narasapur village, Gadag. It is the case of the petitioner that despite production of E-way bill, Weighment ticket and tax invoice, the vehicle along with the goods were confiscated and detained by the Commercial Tax Department at its office at Navanagara, Hubballi. Thereafter, respondent No.3 got issued summons under HC-KAR NC: 2025:KHC-D:7363 Section 70 of the KGST/CGST Act directing the petitioner and respondent No.4 to appear before the authorities on 22.04.2025. Though the petitioner promptly responded to the summons by way of E-mail, respondent No.4 remained elusive and did not appear. Thereafter, respondent No.3 passed confiscation order under Section 130 and 122 of the Central Goods and Services Tax Act. Ten days time was given to pay fine and penalty as prescribed in the said order of confiscation. It is the case of the petitioner that they are ready and willing to deposit the disputed tax amount of Rs.2,18,743/- with the department which is the maximum legitimate claim the tax authorities could have on the transaction as against the determined amount of Rs.12,15,240/-. Therefore, the petitioner is before this Court seeking to quash the impugned order of confiscation and for release of the goods and vehicle in favour of the petitioner and is willing to deposit the tax component amount of Rs.2,18,743/- as he has purchased the goods in good faith by paying entire due amount to respondent No.4. HC-KAR NC: 2025:KHC-D:7363
Per contra, learned AGA representing the respondent-State vehemently contends that, primarily, the writ petition itself is not maintainable, as there is alternative efficacious remedy available to the petitioner for exploring and exhausting the appeal remedy under Section 107 of the KGST Act read with Section 20 of IGST Act. Secondly, it is his contention that, the petitioner might be in collusion with respondent No.4 and that respondent No.4 has not bothered to appear and whereabouts of respondent No.4 are not available. Even if the petitioner is willing to pay the amount as stated before the Court i.e. to an extent of Rs.2,18,743/-, which is the disputed tax amount, the petitioner and respondent No.4 are still required to pay total amount of Rs.14,33,983/-. If the said amount is paid, the respondent would have no objection for releasing the goods and the vehicle in favour of the petitioner. On these grounds, he seeks for dismissal of the petition as not being maintainable.
Learned AGA relies on a Order passed by the Co- ordinate Bench of this Court in Writ Petition HC-KAR NC: 2025:KHC-D:7363 No.100038/20251 whereby in similar situation, a notice was issued under Section 130 of KGST Act and confiscation order was passed and the petitioner therein had approached this Court invoking the writ juri iction. The Co-ordinate Bench of this Court, after hearing both parties, relying upon several judgments passed by the Apex Court and this Court, did not find the need to show indulgence under the writ juri iction by entertaining the writ petition and disposed of the petition granting liberty to the petitioner therein to approach the appellate authority. It would be relevant to extract paragraphs 32 and 33 of the said order:
“32. In the case at hand, the order of confiscation is passed under Section 130 of the KGST supra, exercising power under the IGST. The issue with regard to juri iction is answered in favour of the Revenue holding that the Officer appointed under Section 6 of the KGST is a proper officer under Section 4 of the IGST. On the same reason, the appeal against an order of confiscation by an officer under Section 130 of the KGST would undoubtedly be maintainable under Section 107 of the KGST or Section 20 of the IGST, as the case would be.
In view of the preceding analysis, I hold that the petition before this Court is not entertainable, in the light of existence of an alternative statutory remedy of filing an appeal under Section 107 of the KGST r/w Section 20
1 Order pronounced on 05.03.2025 HC-KAR NC: 2025:KHC-D:7363 of the IGST. Petitioner is granted 4 weeks time to file an appeal. In the event, the appeal is preferred within 4 weeks from the date of receipt of the copy of this order, the Appellate Authority shall consider the issue on its merit, without reference to limitation.”
Under the circumstances, in view of there being an alternative efficacious remedy available under Section 107 of the KGST Act, against an order of confiscation under Section 130 of KGST Act, this Court is not inclined to accept the argument of the learned counsel for the petitioner and agrees with the arguments put forth by the learned AGA with regard to maintainability of the petition and alternative efficacious remedy being available to the petitioner.
Under the circumstances, I pass the following order: This petition is disposed of. The petitioner is at liberty to approach the Appellate Authority by invoking appropriate provisions of law and seek for release of confiscated goods and the vehicle, if, so advised. If, any such application is moved by the petitioner, the same shall be considered expeditiously not later than two weeks from the date of its HC-KAR NC: 2025:KHC-D:7363 filing. Till such time, the confiscated goods and the vehicle shall not be auctioned or no precipitate action shall be taken. With these observations, this petition is disposed of. (PRADEEP SINGH YERUR) JUDGE
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Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.