Facts of the Case

M/s Sri Krishna Jewellers (P) Ltd., through its Director, approached the Telangana High Court by filing Writ Petition No. 38601 of 2022 against the Union of India, Ministry of Commerce and Industry, and Minerals and Metals Trading Corporation Limited (MMTC Ltd.), including its Hyderabad Regional Office.

The petitioner sought issuance of a writ of mandamus or any other appropriate writ, order, or direction requiring the respondents to release the bank guarantee furnished by the petitioner on 23 October 2019 and to refund the security/GST deposits.

The judgment record shows that the petitioner had furnished a bank guarantee of Rs. 35,00,000, which had subsequently been extended. Through I.A. No. 1 of 2022, filed under Section 151 CPC, the petitioner also sought a direction restraining Respondent No. 3 from invoking the said bank guarantee pending disposal of the writ petition.

However, when the matter came before the Court, learned counsel for the petitioner sought permission to withdraw the writ petition with liberty to file a fresh writ petition.

Issues Involved

The proceedings involved the following principal issues:

  • Whether the respondents could be directed under Article 226 of the Constitution of India to release the bank guarantee furnished by the petitioner on 23 October 2019.
  • Whether the petitioner was entitled to refund of the security/GST deposits referred to in the writ prayer.
  • Whether Respondent No. 3 should be restrained from invoking the Rs. 35 lakh bank guarantee pending disposal of the writ petition.
  • Whether the petitioner could withdraw the pending writ petition while preserving liberty to institute a fresh writ petition.

Petitioner’s Arguments

As reflected from the petition prayers and the oral order, the petitioner’s case was that appropriate directions were required against the respondents for:

  • release of the bank guarantee furnished on 23 October 2019;
  • refund of the security/GST deposits; and
  • protection against invocation of the Rs. 35,00,000 bank guarantee during the pendency of the writ proceedings.

At the stage of hearing recorded in the final order, learned counsel for the petitioner, Mr. E. Venkata Siddhartha, sought permission from the Court to withdraw the writ petition with liberty to file a fresh writ petition.

Important accuracy note: The three-page order does not record any further detailed substantive arguments on the merits of the bank guarantee, security deposit, or GST deposit dispute. Therefore, no additional arguments should be attributed to the petitioner beyond what is expressly reflected in the petition prayers and oral order.

Respondents’ Arguments

The respondents comprised:

  1. Union of India, Ministry of Commerce and Industry;
  2. Minerals and Metals Trading Corporation Limited (MMTC Ltd.), represented by its Managing Director; and
  3. MMTC Ltd., Hyderabad Regional Office, represented by its Additional General Manager.

The order records representation for Respondent No. 1 through learned Senior Standing Counsel for the Central Government and for Respondent Nos. 2 and 3 through counsel.

However, the final oral order does not record any detailed substantive arguments or objections advanced by the respondents concerning the release or invocation of the bank guarantee, refund of security/GST deposits, or the petitioner’s request to withdraw the writ petition.

Accordingly, no unrecorded respondent submissions should be inferred or added.

Court Order / Findings

The Telangana High Court noted that learned counsel for the petitioner sought permission to withdraw the writ petition with liberty to file a fresh writ petition.

The Court granted the liberty sought and ordered that:

  • the writ petition stood dismissed as withdrawn;
  • the petitioner was granted liberty to file a fresh writ petition;
  • there would be no order as to costs; and
  • as a sequel, all miscellaneous petitions, if any, pending in the writ petition stood closed.

The operative page of the order expressly records dismissal of the writ petition as withdrawn without costs.

Important Clarification

This order is procedural in nature and must not be presented as a substantive judicial determination on the merits of the underlying dispute.

The Telangana High Court did not adjudicate or conclusively decide:

  • whether the petitioner was legally entitled to release of the bank guarantee;
  • whether invocation of the Rs. 35 lakh bank guarantee was valid or invalid;
  • whether the petitioner was entitled to refund of the security/GST deposits;
  • whether the respondents had acted unlawfully in retaining any deposit; or
  • any substantive GST liability or refund entitlement.

The Court’s recorded determination was confined to permitting withdrawal of the writ petition with liberty to file a fresh writ petition. Therefore, the case should not be cited as a precedent holding that bank guarantees must be released or that security/GST deposits must necessarily be refunded.

Further, while the writ prayer refers to “security/GST deposits,” the order does not identify any specific substantive provision of the CGST Act, 2017 or SGST Act under which such deposit was made or refund was claimed. No such GST section should therefore be invented or attributed to the Court.

Sections / Legal Provisions Involved

Article 226 of the Constitution of India — The writ petition was instituted seeking a writ of mandamus or other appropriate writ, order, or direction for release of the bank guarantee and refund of security/GST deposits.

Section 151 of the Code of Civil Procedure, 1908 — I.A. No. 1 of 2022 was filed invoking the inherent powers of the Court and seeking protection against invocation of the Rs. 35 lakh bank guarantee during pendency of the writ petition.

No specific substantive GST section recorded — The judgment refers to refund of “security/GST deposits” in the prayer but does not specify a particular section of the CGST Act, 2017 or any State GST enactment.

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783419430_1375compressed.pdf

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