Sreekrishna Traders Vs State of Karnataka (Karnataka High Court)
The Karnataka High Court dismissed two writ appeals challenging interim orders passed by a Single Judge regarding release of goods and vehicles confiscated under the CGST/KGST Act. The appeals arose from proceedings where the petitioners sought release of arecanut consignments and vehicles intercepted by authorities and challenged confiscation orders issued in Form GST MOV-11 along with GST DRC-07 summary orders.
The Single Judge had earlier directed provisional release of the goods and vehicles subject to the petitioners furnishing 25% of the demand raised in GST DRC-07 and providing a bank guarantee for the remaining 75%. The order was passed after both parties referred to an earlier Division Bench ruling concerning provisional release on conditions.
The petitioners later sought modification of those interim orders. They argued that in other similar cases involving arecanut traders in Chitradurga District, the High Court had granted interim relief by staying detention orders and directing release of goods and conveyances on deposit of 200% of the tax payable along with indemnity bonds. According to the petitioners, the facts in the present matters were identical.
The petitioners also contended that Rule 138C of the CGST/KGST Rules prescribed a maximum period of three days for inspection and verification proceedings, whereas the authorities had allegedly extended the process to around 45 days. They argued that this defeated their statutory right under Section 129(1)(a) of the Act to secure release of goods by payment of 200% of the tax payable. On this basis, they claimed that the detention and confiscation proceedings were barred by limitation and without jurisdiction.
