Kanumuri Sunadham vs. The Assistant Director Of Mines And Geology

Facts

The petitioner, Kanumuri Sunadham, is the owner of a vehicle transporting polished granite slabs from Andhra Pradesh to Maharashtra. The vehicle was detained by the Assistant Director of Mines and Geology (1st Respondent) and the goods were kept in the custody of the Station House Officer (2nd Respondent). The detention occurred despite the goods being covered by a Tax Invoice and e-way bill. The authorities detained the vehicle for want of proof of royalty payment on the mineral used for the polished granite. The petitioner contended that for finished goods, royalty payment documents are not required, and the goods are covered by a valid tax invoice and e-way bill from a registered seller. The revenue authorities argued that the petitioner was transporting semi-finished/unfinished/uncut slabs and therefore required proof of royalty payment.

Held

The Court held that while raw minerals require royalty payment documentation during transportation, finished products like granite slabs may not. The presence of a valid e-way bill and tax invoice prima facie indicates lawful transportation. The absence of a royalty payment document for finished products should not be a ground for seizure unless there is evidence of illegal extraction or non-payment of dues. The Court noted that similar writ petitions had been disposed of by directing the respondent authorities to verify the description of goods in the Tax Invoice against the goods under transport and take action accordingly, and these orders had attained finality. The Court agreed with this view, stating that the petitioner was on the same footing. Therefore, the Court directed the respondent authorities to verify if the goods were finished granite slabs as per the tax invoice. If they are finished goods, the vehicle and goods are to be released. If the goods are found to be semi-finished/unfinished/uncut slabs requiring further work, the authorities are at liberty to take further action in accordance with the Act and Rules. This exercise was to be completed within one week.

Key Issues

1. Whether the detention of polished granite slabs and the vehicle is illegal when the goods are covered by a valid Tax Invoice and e-way bill, and the petitioner contends they are finished goods not requiring royalty payment proof (Section 20 of the CGST Act, Section 129 of the CGST Act, and Telangana State Minor Mineral Concession Rules, 1966). Petitioner's Arguments: - The goods are finished granite slabs and thus do not require proof of royalty payment during transportation. - The presence of a valid Tax Invoice and e-way bill indicates lawful transportation. - The detention and demand for penalty are arbitrary, contrary to law, and violative of constitutional provisions. - Relied on previous orders of the High Court in similar circumstances. Revenue's Arguments: - The goods are semi-finished/unfinished/uncut slabs, necessitating proof of royalty payment. - The petitioner failed to furnish information regarding the source of procurement and royalty payment. - Relied on decisions in L. Venkateswara Rao v. Singareni Collieries Company Ltd. and M/s. Novel Granites Ltd. v. Government of A.P.