Facts of the Case

The petitioner, owner of lorry bearing registration No. AP 39 Y 6289, filed a writ petition before the Andhra Pradesh High Court challenging a demand notice dated 29.04.2023 imposing a penalty of Rs.4,43,223 in connection with the seizure of his vehicle, which had been transporting polished granite slabs.

The petitioner's case was that the vehicle, hired for transporting granite slabs from Telangana to Karnataka, was seized on 05.04.2023 despite holding valid transit permits issued by the Government of Telangana. An earlier writ petition on the same seizure had been disposed of directing verification of valid transit permits before release; instead of releasing the vehicle, the third respondent (Mining authority) issued the impugned demand notice.

The respondents' case, on inspection, was that the granite was steel-grey colour granite available only in Guntur and Prakasam Districts (contradicting the claimed Telangana origin), that the vehicle's actual travel route (per the driver's own account and GPS data) and billing did not match the claimed transaction, and that no seigniorage fee had been paid, justifying the penalty under Rule 26(2) of the Andhra Pradesh Minor Mineral Concession Rules, 1966.

The matter was heard and disposed of by a Single Judge on 10.05.2023, at the admission stage itself.

Issues Involved

  1. Whether the demand notice imposing a penalty of Rs.4,43,223 for alleged violation of transit-permit and seigniorage-fee rules was sustainable, or should be reduced.

Petitioner's Arguments

  • The petitioner contended the demand notice was contrary to Rule 26 of the AP Minor Mineral Concession Rules, 1966, and that the amount determined (Rs.4,43,223) was on the higher side.

Respondent's Arguments

  • The State respondents contended that inspection revealed discrepancies in the claimed origin, route and billing of the granite consignment, that no seigniorage fee had been paid, and that the State had the power under Rule 26(2) to levy the penalty for the infraction, which was correctly imposed.

Court Order / Findings

  • The Court noted the petitioner's contention that the penalty amount was on the higher side, but expressly stated it was proceeding 'without going into the merits or demerits of the case'.
  • To meet the ends of justice, the Court disposed of the writ petition by directing the petitioner to pay a reduced amount of Rs.1,50,000 (instead of the demanded Rs.4,43,223) within two weeks, on which the vehicle would be released.
  • No costs were awarded, and pending miscellaneous applications were closed.

Important Clarification

This is a pragmatic, negotiated compromise order, not a reasoned ruling — the Court expressly declined to examine whether the penalty was legally justified, whether the transit permits were valid, or whether the discrepancies alleged by the department were accurate. It simply fixed a reduced payment to release the vehicle. It has no connection to GST law; the dispute concerned mining seigniorage fees and transit permits under state mineral concession rules.

Sections Involved

  • Andhra Pradesh Minor Mineral Concession Rules, 1966 – Rule 26(2) (penalty for unauthorised transport of minor minerals)

Decision – In Favour of

The writ petition was disposed of on a compromise basis without a decision on merits; the petitioner obtained partial relief in the form of a reduced penalty (Rs.1,50,000 instead of Rs.4,43,223) for release of his vehicle, but the underlying legality of the seizure and penalty was never adjudicated.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WP No. 12038 of 2023
  • Coram: Justice K.Suresh Reddy
  • Date: 10.05.2023

Link to Download the Order

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