M/S. Varalakshmi Traders vs. The Additional Commissioner Of Commercial Taxes

Facts

The petitioner, M/s. Varalakshmi Traders, filed a writ petition before the High Court of Karnataka seeking to quash three orders in Form GST MOV-02, dated December 8, 2022, passed by the Commercial Tax Officers (Enforcement) and the Deputy Commissioner of Commercial Taxes (Enforcement), Ballari. These orders were related to the detention of goods. The petitioner also sought a direction for the immediate release of the detained goods. The petition was filed under Article 227 of the Constitution of India. The petitioner's counsel submitted that the petition had become infructuous, but sought liberty to approach the respondents for the return of a bank guarantee, asserting entitlement to its return upon the disbursal of the goods. The Additional Government Advocate for the respondents stated that these factual assertions required verification.

Held

The Court noted the submission by the petitioner's counsel that the writ petition had become infructuous. The Court granted liberty to the petitioner to approach the concerned respondents (second to fifth respondents) for the return of the bank guarantee within two weeks from the date of receiving a certified copy of the order. The Court further directed that if such a representation is made, the concerned respondents shall decide on the representation within a period of four weeks from the date of the representation. The Court did not explicitly rule on the entitlement to the bank guarantee but provided a procedural mechanism for its consideration. The core issue of quashing the orders and releasing the goods was rendered moot by the petitioner's submission.

Key Issues

1. Whether the petitioner is entitled to the return of the bank guarantee upon the disbursal of the detained goods, and if so, what is the procedure for its return? (Question of fact and law) The petitioner argued that upon the disbursal of the goods, they are entitled to the return of the bank guarantee furnished. They sought liberty to approach the concerned respondents for this purpose. The revenue, represented by the Additional Government Advocate, contended that the factual assertions made by the petitioner regarding the disbursal of goods and the entitlement to the bank guarantee would need to be verified by the concerned authorities before any decision could be taken.