Facts of the Case

This is a case under the Essential Commodities Act and Civil Supplies regulations, not a GST case — a GST certificate is mentioned only as one of the documents (along with the lease agreement and B-Register) that Civil Supplies officials asked to inspect during their raid. The petitioner, M/s Srinivasa Traders, a wholesale rice dealer, had 351 bags of raw rice (17,550 kg) seized from Sri Lakshmi Narasimhaswamy Rice Mill on 20 July 2023, even though there was no discrepancy between the physical stock and the mill's B-Register. The Collector (Civil Supplies) subsequently rejected the petitioner's plea for release and ordered public auction of the seized stock on 19 October 2023, prompting this writ petition before the Andhra Pradesh High Court.

Issues Involved

  1. Whether the seizure and subsequent order directing public auction of the rice stock, in the absence of any discrepancy between physical stock and mill records, was legally sustainable.
  2. Whether the seized stock should be released to the petitioner pending resolution of the underlying criminal proceedings.

Petitioner's Arguments

  • The physical stock matched the B-Register maintained at the mill; there was no basis for the seizure.
  • Despite this, the stock was highhandedly seized and handed over to the Civil Supplies MLS Point for safe custody, and the Collector later ordered public auction of the stock instead of releasing it.

Respondent's Arguments

  • The inspecting authorities had acted on credible information and conducted a search, resulting in seizure of the stock and initiation of criminal proceedings.

Court Order / Findings

  • Relying on its own Division Bench precedent in Onteru Bhaskar vs State of Andhra Pradesh, the Court held it appropriate to direct release of the seized rice stock to the petitioner, subject to conditions.
  • The Collector's order dated 19 October 2023 directing public auction of the stock was set aside.
  • The Court directed release of the seized rice to the petitioner on furnishing movable or immovable property security in the State of Andhra Pradesh equivalent to the value of the seized stock, within two weeks.

Important Clarification

This order concerns release of essential-commodity stock under a Civil Supplies enforcement action and does not decide any question of GST law; the petitioner's GST registration was only one of several documents examined during the inspection.

Sections Involved

  • Essential Commodities Act, 1955
  • Constitution of India — Articles 14, 19(1)(g) and 226

Decision – In Favour of

Decided in favour of the petitioner: the auction order was set aside and release of the seized stock directed on furnishing security. Not a GST ruling.

Case Details

Court: High Court of Andhra Pradesh at Amaravati
Case No.: Writ Petition No. 28751 of 2023
Coram: Hon'ble Sri Justice Venkateswarlu Nimmagadda
Date of Order: 2 November 2023

Link to Download the Order

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