Dismissed¶62

M/S Royal Steel v. State of Karnataka

Karnataka HC17 Jul 2025WP/14265/2025

Case brief

AI extract

What is this about?

NC: 2025:KHC:26698; WP No. 14265 of 2025 (T-RES), Royal Steel v. State of Karnataka & CTO (Enforcement)-39 (Karnataka HC, 17.07.2025, Suraj Govindaraj J.). Keywords: Section 129(1) SGST/CGST Act seizure; interception of vehicle KA-50-B-5819 carrying 11,910 KG MS scrap; invoice and e-way bill dated 20.04.2025; Form MOV-01/MOV-02/MOV-04; transporter denial; LR number suspect; disputed facts and factual enquiry in writ petition; alternative remedy appeal under Section 107 KGST Act; writ dismissed with liberty to appeal; original files returned to HCGP.

What did the court decide?

No substantive relief granted; liberty reserved to the petitioner to approach the appropriate Appellate Forum, and the original files directed to be returned to the learned HCGP. ¶62

M/S Royal Steel Vs State of Karnataka — GST and Indirect Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

No substantive relief granted; liberty reserved to the petitioner to approach the appropriate Appellate Forum, and the original files directed to be returned to the learned HCGP.

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Issue for consideration

Whether the order dated 21.04.2025 passed by Respondent No.2 under Section 129(1) of the SGST/CGST Act 2017 ought to be quashed and vehicle No.KA-50-B-5819 carrying 11,910 KGs of MS Scrap released to the petitioner's custody. +1 more

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Court's answer

Since adverting to the disputed facts could cause prejudice to either party, the Court refrained from making findings on them and dismissed the writ petition, reserving liberty to the petitioner to approach the appropriate Appellate Forum.

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Ratio / Principle

The original file and statements on record indicate a complete denial by the alleged transporter; if there is no transporter, the invoice bearing the transporter's LR number is suspect, and it must be ascertained from whose custody the goods were seized, who was transporting them, and whether applicable laws were violated.

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Key takeaways

Whether taxes were paid on the goods and on the transport, and who actually transported the goods, are disputed matters requiring factual enquiry which cannot be made in a writ petition of this nature.ratio¶59
The Court expressly refrained from adverting to the disputed facts so as not to cause prejudice to either party; accordingly no findings were recorded on the genuineness of the documents or the seizure.ratio¶60

Detailed headnote1 paragraphs

Karnataka High Court (Suraj Govindaraj, J.; decision dated 17.07.2025) dismissed a writ petition under Articles 226 & 227 seeking quashing of an order dated 21.04.2025 passed by the Commercial Tax Officer (Enforcement)-39 under Section 129(1) of the SGST/CGST Act 2017 and release of vehicle KA-50-B-5819 carrying 11,910 KGs of MS scrap, intercepted on 21.04.2025 with invoice and e-way bill dated 20.04.2025. The alleged transporter (M/s Royal World) completely denied entering into any transaction or providing transport service, leading the Court to treat the invoice bearing the transporter's LR number as suspect; questions of who held/carryied the goods and whether taxes were paid on the goods and transport were held to be disputed facts requiring factual enquiry incapable of resolution in a writ petition. The writ petition was dismissed with liberty to pursue the appellate remedy under Section 107 of the KGST Act, and the original files were ordered returned to the learned HCGP. No findings were recorded on the disputed facts.

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NC: 2025:KHC:26698 WP No. 14265 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF JULY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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WRIT PETITION NO. 14265 OF 2025 (T-RES)

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BETWEEN

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M/S ROYAL STEEL (A PROPRIETARY CONCERN), HAVING ITS OFFICE AT NO. 36, 6^TH MAIN, SINGASANDRA INDUSTRIAL AREA, BENGALURU 560 068, REPRESENTED BY ITS PROPRIETOR, MR. SHANWAZ PASHA

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...PETITIONER

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(BY SRI. BHARATH KUMAR.V., ADVOCATE)

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AND

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Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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STATE OF KARNATAKA THROUGH ITS SECRETARY, DEPARTMENT OF COMMERCIAL TAXES GOODS AND SERVICES TAX (GST), VIKASA SOUDHA, AMBEDKAR VEEDHI, BENGALURU 560 001.

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COMMERCIAL TAX OFFICER,

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(ENFORCEMENT)-39, SOUTH ZONE, HAVING OFFICE AT ROOM NO. 108, 1^ST FLOOR, B BLOCK, VTK-2, KORAMANGALA, BENGALURU 560 047.

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…. RESPONDENTS

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(BY SMT. JYOTHI M. MARADI., HCGP)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD. 21.04.2025 BEARING NO. ADCOM/ENF/SZ/CTO(ENF)-39/MOV6/NO.8/2025-26 PASSED BY THE R-2 UNDER SECTION 129(1) OF THE SGST/CGST ACT 2017 (ANNX-A)AND ETC.

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NC: 2025:KHC:26698 WP No. 14265 of 2025

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HC-KAR

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THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING BEEN RESERVED FOR ORDERS ON 03.07.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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CAV ORDER

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The Petitioner is before this Court seeking for the

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following reliefs:

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i. Issue a writ, order or direction in the nature of Certiorari or any other appropriate writ, order or direction quashing the order dated 21.04.2025 bearing no. Adcom/ENF/SZ/CTO(ENF)-39/MOV6/No.8/2025-26, passed by the R2 under Section 129(1) of the SGST/CGST Act 2017 (Annexure-A)

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ii. Issue a writ, order or direction in the nature of mandamus or any other appropriate writ, order or direction, directing the Respondent No.2 herein to release the vehicle bearing No.KA-50-B-5819 along with the loaded goods of 11,910 KGs of MS Scrap to the custody of the petitioner herein.

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iii. Grant such other relief that this Hon’ble Court be pleased to deem fit in the facts of the present case.

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The Petitioner claims to be in the business of procuring iron and metal scraps on a bulk basis from various businesses and, in turn, selling them to its customers. Insofar as subject matter of the present petition is concerned, the petitioner is stated to have

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HC-KAR

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purchased scrap metal to an extent of 11,910 KGs., and sold it the same to M/s A One Ispat Pvt., Ltd. as regards which the petitioner had availed the service of one M/s Royal Steel, which was being transported vide motor vehicle bearing No.KA-50-B-5819, vide invoice dated 20.04.2025 and e-way bill dated 20.04.2025. The said consignment was intercepted by Respondent No.2-Commercial Tax Officer (Enforcement) on 21.04.2025, and a verification of the documents was demanded.

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A statement in Form No.MOV-01 dated 21.04.2025 was recorded and the same was subjected to physical verification of the consignment as well as a document vide Form No.MOV-02. The petitioner claims that though all the requisite documents have been submitted, Respondent without any cogent reason on the alleged ground that the documents are defective, seized the vehicle. Physical verification of the goods was conducted Form No.MOV-04 was

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HC-KAR

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issued and thereafter subsequent proceedings had been carried out. It is in that background, that the petitioner is before this Court seeking for the aforesaid relief.

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Sri.Bharath Kumar.V., learned counsel for the petitioner would submits that;

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4.1. The petitioner has furnished all the relevant documents, and the goods have been subjected to physical verification, the weight of the goods, the quality of the goods as also the nature of the goods has been found to be in terms of invoice and e-way bill. The documents being proper, the Respondents could neither have seized the vehicle nor the goods and on that ground, he submits that this Court ought to exercise its extraordinary jurisdiction and grant the relief sought for.

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Smt.Jyoti. M. Maradi., learned HCGP would however vehemently oppose the same.

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HC-KAR

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5.1. Her submission is that on enquiry the petitioner

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had indicated that it was the services of M/s Royal World which was used for the purpose of transport. The statement of the proprietor of M/s Royal World has been recorded, who has categorically indicated that he has not entered into any transaction nor provided any service to the petitioner. The vehicle in question does not belong to M/s Royal World or the proprietor.

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5.2. In that background, she submits that there are documents which have been created, which are required to be looked into, there are disputed facts which are involved in the petition is not as simple as what the learned counsel for the petitioner has indicated.

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5.3. There being detailed enquiries which have been substantially carried out, neither the vehicle nor the goods can be released at this stage.

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HC-KAR

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5.4. She submits that the petitioner has an

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alternative efficacious remedy in terms of an Appeal under Section 107 of the Karnataka Goods and Services Tax Act, 2017 (KGST Act) .

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Heard Sri.Bharath Kumar.V., learned counsel appearing for the petitioner and Smt.Jyoti. M. Maradi., learned HCGP and produced papers.

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The submission of Smt.Jyoti. M. Maradi., learned HCGP is right, inasmuch as the original file as also the statements which have been placed on record indicates a complete denial by the alleged transporter. If there is no transporter, the invoice bearing an LR number of the transporter which has not been issued by the transporter is suspect. If that were to be suspect and the transporter has not transported the goods, it is required to be ascertained as to from whose custody the goods have been seized and who was transporting the

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NC: 2025:KHC:26698 WP No. 14265 of 2025

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HC-KAR

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goods and whether there is any violation of the applicable laws in such an activity.

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Whether taxes have been paid on the items in question as also on the transport would have to be ascertained. The petitioner claiming that it had used the services of M/s Royal World, M/s Royal World having denied providing such services. These aspects require a factual enquiry which cannot be made in a writ petition of this nature.

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In that view of the matter, since adverting to any of the disputed facts could cause prejudice to either of the parties, this Court refrains from doing so and passes the following;

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ORDER

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