M/S. Aaiz Steel vs. Commercial Tax Officer
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Cause title — parties, addresses and appearances
ORDER OF DETENTION DATED 03.12.2024 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:
CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks the following reliefs: "i) Quashing the impugned Order of Detention dated 03.12.2024 bearing No.CTO(ENF)/MDK/VIG- 12/2024-25 passed by the 1st respondent in Form NC: 2025:KHC:14375 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.KA-16-D-2418 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.KA-16-D-2418 by the 1st respondent and all the proceedings in 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." NC: 2025:KHC:14375
Learned counsel for the petitioner submits that the subject conveyance bearing No.KA-16-D-2418 and subject goods may be released in favour of the petitioner by imposing terms and conditions and that the petitioner would abide and comply with the same, in accordance with law.
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. Description Amount Page number in the writ petition
Value of the goods as per Delivery Challan (Inclusive of CGST and SGST paid at 18% Rs.10,27,860/- 121 (Annexure-H)
Tax paid on the goods vide Reverse Charge Mechanism (RCM) Rs.1,56,793/- 121 (Annexure-H)
Penalty under Section 129(1)(a) of the GST Act - (200% of the tax amount) Rs.1,56,793/- 121 (Annexure-H)
Value of the goods determined in the confiscation order based on the 3rd party valuation reports (exclusive of GST) Rs.18,27,561/- 225 (Annexure-R) NC: 2025:KHC:14375 Sl. No. Description Amount Page number in the writ petition 5. 25% of the value of the Goods as per the Delivery Challan - As per Sl.No.1 Rs.2,56,965/- - 6. 75% of the value of the Goods as per the Delivery Challan - As per Sl.No.1 Rs.7,70,895/- -
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.
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.
With the consent of the learned counsel for the parties, the appeal is heard finally.
The challenge in this appeal is to the order dated 09.08.2024 passed by the learned Single Judge, as an NC: 2025:KHC:14375 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."
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.
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.
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, NC: 2025:KHC:14375 2017. In any case, the liability could not have been determined upon the respondent No.1 on facts.
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 that, the total goods value is of `12,83,354/-, we deem it appropriate to dispose of 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.
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.” NC: 2025:KHC:14375
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.
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.
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 bearing No.KA-16-D-2418 in favour of the petitioner immediately upon the petitioner depositing aforesaid 25% of the value of the goods in a sum of Rs.2,56,965/- as well as furnishing Bank Guarantee to an extent of 75% in a sum of NC: 2025:KHC:14375 Rs.7,70,895/- 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. (S.R.KRISHNA KUMAR) JUDGE
NBM / SV List No.: 3 Sl No.: 1
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.