M/S South INDIA Transports vs. The Deputy Commissioner Of Commercial Taxes - Karnataka High Court, 25 January 2022

Cause title — parties, addresses and appearances

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JANUARY, 2022 BEFORE THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV WRIT PETITION NO.23603 OF 2021 (T - RES) BETWEEN: M/s. South India Transports, GSTIN 29ADHFS9256J1ZA, D.No.9/19/679/1,Bhatkal Bazar, Bunder, Mangalore - 575 001, Represented herein by its Partner and Person-in-Charge, Mr.Kishore D.Mav. … Petitioner (By Sri.Sandeep Huilgol, Advocate) AND: 1. The Deputy Commissioner of Commercial Taxes, Enforcement, Udupi, Swami Vivekananda Road, 4th Cross, Ajjarakadu, Udupi - 576 001. 2. The State of Karnataka, Represented herein by the Principal Secretary - Finance Department, Ministry of Finance, Government of Karnataka, Vidhana Soudha, Bengaluru - 560 001. ...Respondents (By Sri.Hema Kumar, AGA) 2 This Writ Petition is filed under Article 226 of the Constitution of India praying to quash the impugned order dated 07.12.2021 in form GST MOV-11 passed by the R-1 under Section 130 of the Karnataka Goods and Services Tax Act 2017 R/w Section 130 of the Central Goods and Services Tax Act 2017 and Sections 4 and 20 of the Integrated Goods and Services Tax Act 2017 Annexure-A and etc. This Writ Petition coming on for Orders, this day, the Court made the following:

O R D E R After arguing the matter for sometime, learned counsel for the petitioner submits that, if he is permitted to file an appeal keeping open the contentions, he would be willing to relegate himself to the substantive remedy of an appeal. However, it is submitted that the arecanut goods are admittedly perishable in nature and further delay in disposing off the said goods that are seized would lead to drastic reduction in the value of the goods.

Without entering into the merits of the contentions raised in the writ petition it would be appropriate to relegate the petitioner to avail the appeal remedy.

Insofar as the request for release of goods is concerned, the learned Government Advocate would submit that the arrangements made on equitable considerations would be taken benefit by the other Assessees' by relying on the Order of this Court, hence, in the event this Court is inclined to permit release of goods, the Court ought to pass the order limited to the facts of the present case and order passed must not be in the nature of a general order that would be applicable to other cases also.

After noticing that the disputed tax is Rs.2,43,426/- while the fine amount is Rs.46,25,075/-, it is prima facie apparent that the fine amount works out to eighteen times. In the present case it is to be noticed that tax of Rs.2,43,426/- has been determined along with penalty of Rs.46,25,075/-. The fine amount is determined at 4 Rs.46,25,075/-, which approximately works out to nineteen times the tax and ten times the amount of tax with penalty.

In the peculiar facts of the case, taking note of the contention raised, it would be appropriate to grant liberty to the petitioner to file an appeal. If the appeal is presented within a period of two weeks from the date of release of the order, the said appeal would be taken up and considered on its merits. The petitioner to deposit while filing an appeal the statutory deposit of 10% of the disputed tax. The petitioner also to furnish Bank Gurantee for the remaining amount. Upon payment of 10% of the disputed tax amount and furnishing of Bank Guarantee, goods may be released forthwith. The arrangements enabling the petitioner to file an appeal is clarified is limited to the peculiar facts of the case and in light of the contentions raised and also taking note of 5 the fine amount as noticed above. Bank Guarantee to be furnished along with the appeal itself. Accordingly, the petition is disposed off. JUDGE PN