M/S Bhagwati Enterprises vs. Commercial Tax Officer - Karnataka High Court, 05 July 2022

Cause title — parties, addresses and appearances

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF JULY 2022 BEFORE THE HON’BLE MR. JUSTICE M.I.ARUN WRIT PETITION No.13297 OF 2022 (T-RES) BETWEEN: M/S BHAGWATI ENTERPRISES SURVEY NO 5, GADAMSONAHALLI KASABA HOBLI MALUR TALUK KOLAR DISTRICT - 563130 GSTIN 29KVLPS2095P1Z7 REP. BY ITS PROPRIETOR MR SURESH KUMAR J AGED ABOUT 24 YEARS ... PETITIONER (BY SRI.K. J. KAMATH, ADV.) AND: 1. COMMERCIAL TAX OFFICER (VIGILANCE)- 11 “A” BLOCK 3RD FLOOR, VANIJYA TERIGE KARYALAYA - 2 VIVEKANAGAR, KORAMANGALA BENGALURU – 560 047 2. COMMERCIAL TAX OFFICER (VIGILANCE)- 17, “A” BLOCK 3RD FLOOR, VANIJYA TERIGE KARYALAYA - 2 VIVEKANAGAR, KORAMANGALA BENGALURU – 560 047 3. JOINT COMMISIONER OF COMMERCIAL TAXES, VIGILANCE 3RD FLOOR VANIJYA TERIGE KARYALAYA - 2 VIVEKANAGAR, KORAMANGALA BENGALURU – 560 047 ... RESPONDENTS 2 (BY SRI.K. HEMA KUMAR, AGA) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE/QUASH THE IMPUGNED ORDER DATED 03.06.2022 PASSED BY R1 U/S 130 OF THE KGST/CGST AND IGST ACT BEARING NO.ORDER NO.JCCT/VIG/CTO/11/GCE-05/2022- 23 AS PER ANNEXURE-T, TO SET ASIDE/QUASH THE IMPUGNED ORDER DATED 22.06.2022 PASSED BY R2 UNDER SECTION 67 READ WITH SECTION 6, 122 AND 130 OF THE KGST/CGST AND IGST ACT BEARING NO.JCCT(VIG)/CTO/(VIG)-17/LKL/INS-01/2022-23-MA INS NO.05/2022-23 - T NO.1226/22-23 AS PER ANNEXURE-Y AS THE SAID IMPUGNED ORDERS ARE PASSED FLOUTING THE PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY QUASH THE ENTIRE PROCEEDINGS AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

The petitioner is a proprietary concern registered under the provisions of the Karnataka Goods and Services Tax Act, 2017/the Central Goods and Services Tax Act, 2017 (‘the KGST Act/CGST Act’ for short). It is engaged in trading of Pan Masala and Tobacco products. In the process, it was transporting tobacco products from Bengaluru to Malur. The same was being unloaded at a place near Malur and certain other quantity of products was already stored in the said place. On the ground that the 3 place where it was being unloaded/stored was not the place where the products were intended to be transported the goods have been seized by the respondents-authorities and it has culminated in orders being passed under the provisions of Section 130 of the KGST Act/CGST Act in respect of the goods which was being unloaded and under Section 67 r/w Sections 6, 122 and 130 of the KGST Act/CGST Act in respect of the goods which were stored in the premises. Pursuant to the said orders, the goods which were being unloaded and were seized have been put for auction and the bids are scheduled to be opened on 6th July 2022. Aggrieved by the same, the instant writ petition is filed.

The case of the petitioner is that in the process of expanding its business it has taken on lease a place about 12 kms. away from Malur which it is using as a godown and it had sought necessary permission from the authorities regarding the same. Initially, the same was rejected. Subsequently, it was granted on 06.05.2022. Due to constraints in the business, it was forced to unload the 4 products at the said godown on 26.04.2022 when the permission had not yet been granted and at that time, the products were seized. It is submitted that the transaction was a bona fide transaction, there was no diversion of goods, it has paid all the necessary duties and taxes applicable and the impugned orders have been passed without appreciating the facts properly. It is further contended that it has a good case on merits and if the order staying auction is not granted, the products would be sold at a very cheap rate and it will be put to irrepairable loss and injury.

On the said grounds, the impugned order passed by respondent no.1 under Section 130 of the KGST Act/CGST Act bearing No.JCCT(VIG)/CTO-11/GCE-05/2022-23 dated 03.06.2022 vide Annexure-T to the writ petition and the impugned order passed by respondent no.2 under Section 67 r/w Sections 6, 122 and 130 of the KGST Act/CGST Act bearing No.JCCT(Vig)/CTO(Vig)-17/LKL/INS-01/2022-23 MA INS No.05/2022-23 - T No.1226/22-23 dated 22.06.2022

5 vide Annexure-Y to the writ petition are prayed to be set aside.

Per contra, the learned Additional Government Advocate appearing for the respondents upon instructions submits that there is a serious doubt about the goods being loaded in Bengaluru and transported from Bengaluru itself. He further submits that there are certain other disputes with regard to facts which cannot be gone into in the writ proceedings. He also submits that the petitioner has an alternative efficacious remedy under Section 107 of the KGST Act/CGST Act and both the impugned orders are appealable under the said provisions. It is contended that the goods being perishable in nature it is required that the same be auctioned at the earliest to realize the highest value. On the said grounds, it is prayed that the writ petition be dismissed.

Admittedly, the impugned orders passed are appealable under Section 107 of the KGST Act/CGST Act and the petitioner has an alternative efficacious remedy of appeal. Hence, the writ petition is liable to be dismissed

6 reserving liberty to the petitioner to approach the Appellate Authority in accordance with law. However, taking into consideration that 06.07.2002 is fixed as date for opening of bids, if some interim protection is not granted to the petitioner, the entire proceedings and the appeal it may file challenging the impugned orders would become infructuous.

Hence, the following: ORDER

The writ petition is dismissed reserving liberty to the petitioner to approach the appropriate forum and challenge the impugned orders in accordance with law.

The respondents shall not open the bids and finalise the auction proceedings till 27th July 2022. JUDGE

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