M/S. Sri Lakshmi Narasimha Rice Mill vs. The State Of Andhra Pradesh

The petitioner is the proprietor of M/s.Sri Lakshmi Narasimha Rice Mill and is a trader engaged in the business of food grains such as paddy and rice. The petitioner’s firm is registered under the GST Act bearing Registration Number GSTIN:37BPXPG9700A1ZS. The petitioner purchases the paddy from ryoths, mills the same in her rice mill, and sells the resultant rice and brokens to different traders, hostels and individuals. She also purchases rice from other wholesale traders.

While so, on 22.07.2023 at about 7:00 AM the Civil Supplies Deputy Tahsildar, Kandukur, the 3rd respondent, inspected the petitioner’s mill along with panchayatdars, in the absence of the petitioner. At that time, the petitioner’s husband was present and produced the entire mill records including the tax invoices/bills of supply evidencing purchase of the raw rice, steam rice, brokens etc., from different traders. Though the stocks available in the mill tallied with book balances, the 3rd respondent illegally seized the entire stock available in the petitioner’s mill and handed over the same to one Mutheneni Subba Rao, Proprietor of M/s.Sri Lakshmi Srinivasa Rice Mill, Pedda Pavani, Lingasamudram Mandal. The rice and brokens were handed over to the Incharge, MLS Point, Vinjamur, the 4th respondent for safe custody and filed 6-A case before the 2nd respondent. Though the entire records, including B-Register and tax invoices, were produced before the 3rd respondent, without considering the same, the entire stock was seized alleging that the rice found in the mill was PDS rice. At the time of seizure, the 3rd respondent collected samples from the seized rice and sent the same for analysis to the District Manager, APSCSC Ltd., Nellore.

Thereafter, the petitioner filed a petition on 11.08.2023 before the 2nd respondent seeking release of the seized stocks. In the said petitioner, the petitioner clearly stated that in view of the lapse of the GOI S.O. No.3543 (E) dated 29.11.2013 from 01.12.2014 no Food Grains License(F.G.L) is required to do business as the same is not applicable in respect of paddy and rice. Therefore, no food license is required to carry on such business. The petitioner has been purchasing paddy, milling the same in the aforesaid rice mill and selling it to different traders etc., as per the purchase orders and requested for release of the seized paddy.

In pursuance of which, the 2nd respondent, without even looking into the petition filed by the petitioner, passed an order in Rc.B2.239/2023, dated 26.08.2023, directing to sell the seized stock of 17725 kgs of rice through public auction. The 2nd respondent further ordered release of the miller’s own stock of Grade A paddy and broken rice to the petitioner on production of a bank FDR for an amount of Rs.40,000/-. Immediately after receipt of the impugned order dated 26.08.2023 the petitioner filed a modification petition on 31.08.2023 before the 2nd respondent, clearly stating that she had not violated any Control W.P.NO.25169 OF 2023 Orders and that the seized stock was rice purchased from different traders and not the PDS rice. The petitioner requested the 2nd respondent to stop the public auction and to release the seized stock on furnishing a personal bond or token bank security and to modify another limb of interim order directing to produce the bank FDR for release of Grade A paddy and broken rice.

The case of the petitioner is that no orders have been passed on the modification petition by the 2nd respondent till date. Challenging the order dated 26.08.2023, the present writ petition is filed.

When the matter came up for admission, on 27.09.2023, this Court passed the following interim order:- “Till such time, the proceeding bearing Rc.B2.239/2023, dated 26.08.2023 (Ex.P.1) shall be kept in abeyance.”

However, the interim order was not extended thereafter. The 2nd respondent filed a counter-affidavit duly reiterating the facts stated by the petitioner and further submitted that as per Commissioner of Civil Supplies, Andhra Pradesh, CCS.Ref.No.PI(3)/1831/2014 dated 09.04.2015, no license is required for transport of rice and paddy. However, it was also W.P.NO.25169 OF 2023 stated therein that the A.P.Rice Procurement (Levy) Order, 1984, is in force and action can be taken against the Miller/Traders for violation of the prevision of Levy Order. The relevant extract is submitted hereunder:

It is further submitted that the clause (16) of the A.P.Rice Procurement (Levy) Order, 1984 dated 25.02.1984 is clearly stated that miller or dealers are required to maintain “A & B” Registers, which the petitioner allegedly failed to maintain. It is further stated that on account of prima-facie irregularity established, the 3rd respondent seized the stocks in the petitioner’s rice mill under cover of Panchanama in the present of panchayatidars/mediators. It is further stated that due to the absence of a proper B-Register and supporting documents, and based on the invoices produced during inspection and the mahazar dated 26.08.2023, the 2nd respondent passed the W.P.NO.25169 OF 2023 impugned proceedings, which are stated to be in accordance with law. It is also stated that a show cause notice has already been issued and that the petitioner’s explanation is awaited, as statutory proceedings under Section 6-A are pending before the Joint Collector/Collector (Civil Supplies), SPSR Nellore District. The respondents therefore prayed for dismissal of the writ petition, stating that the seized stock is perishable in nature and that final orders would be passed after due enquiry.

Heard learned counsel for the petitioner as well as learned Assistant Government Pleader for Civil Supplies representing the respondents.

The learned Assistant Government Pleader has brought to the notice of this Court that 6-A proceedings have not been finalized by the District Collector i.e., the 2nd respondent and as such, requested to grant some time for completing the enquiry under 6A proceedings. However, further stated that to the request made by the petitioner for release of the seized stock on the condition of his furnishing immovable property as security shall be considered by the respondent, subject to the result of the finalization of the 6A proceedings before the 2nd respondent.

Though 6A proceedings were initiated on 26.08.2023 itself, as the respondents have failed to complete the enquiry till date, instead of going into the merits of the case, the Writ Petition is disposed of directing the petitioner to furnish self or 3rd party immovable property as security for release of the seized stock as well as lorry, within a period of two (02) weeks from the date of receipt of copy of the order. On receipt of the same, the 2nd respondent shall release the seized stock. The 2nd respondent is further directed to complete the enquiry under 6A of the E.C. Act, as expeditiously as possible, preferably within a period of two (02) months from the date of receipt of copy of the order. No costs.