Sri. Raghavendra Traders vs. The Government Of Karnataka

Held

The Court acknowledged that the primary dispute revolved around the valuation of the goods, the absence of documents at the time of interception, and the quantum of penalty levied. These were identified as factual disputes requiring adjudication before the Appellate Authority. Consequently, the Court decided to relegate the petitioner to the Appellate Authority without expressing any opinion on the merits of the case. However, considering the circumstances, the Court directed the second respondent to release the vehicle and goods forthwith, subject to the petitioner furnishing a bank guarantee of Rs. 9,23,650/- and depositing an additional Rs. 1,08,026/-, in addition to the amount already deposited. This release was made subject to the outcome of the appeal to be filed by the petitioner. The Court granted the petitioner two weeks to file an appeal, with the Appellate Authority directed to decide the matter on merits without raising objections regarding limitation. All rights and contentions of both parties were left open for adjudication before the Appellate Authority.

Facts

The petitioner, Sri Raghavendra Traders, challenged orders dated March 22, 2018, passed by the Commercial Tax Officer (South Zone), Bengaluru, under the CGST Act and KGST Act. The petitioner's vehicle, bearing registration No. TN-77D-8555, carrying goods under invoice No. 481 dated August 7, 2018, was intercepted on March 8, 2018, at Mysuru Road, Bengaluru. The driver did not possess the invoice and other sale documents at the time of interception. The vehicle and goods were seized. The petitioner furnished the invoice the next day, and the authorities issued a notice for proposed tax and penalty under Section 129(1)(b) of the CGST/KGST Acts. The petitioner paid Rs. 1,22,886/- towards tax and penalty, but the vehicle and goods were not released, prompting the writ petitions.

Key Issues

1. Whether the impugned orders imposing tax and penalty under Section 129(1)(b) of the CGST Act and KGST Act are sustainable when the petitioner has deposited the tax amount pertaining to the tax invoice submitted. Petitioner's arguments: The petitioner contended that despite depositing the full tax amount related to the submitted tax invoice, the vehicle and goods have not been released. They sought immediate release of the vehicle and goods, with liberty to file an appeal, as the seizure has adversely affected their livelihood. They acknowledged the alternative remedy but pleaded for expedited relief due to the urgency. Respondents' arguments: The Government of Karnataka, represented by the Commercial Tax Officer, argued that no documents were produced at the time of interception. The subsequently produced tax invoice did not reflect the correct valuation, necessitating the determination of market value by the respondent. They further argued that the petitioner failed to establish ownership of the goods, leading to the determination of tax and penalty under Section 129(1)(b). The petitioner had only paid Rs. 1,22,886/- against the total determined amount of Rs. 18,47,300/-, hence the non-release. They contended that the petitioner should exhaust the alternative remedy before approaching the High Court under writ jurisdiction.