Facts of the Case:
In this case, the appeal was filed by the writ petitioner challenging an interim order dated 17 December 2025, by which the Single Bench had declined to direct provisional release of goods seized under Section 129 of the CGST Act, 2017. The appellant claimed ownership of a consignment of areca nuts, which were intercepted by GST authorities while in transit under a valid e-way bill. The goods were admittedly perishable in nature.
Following interception, the appellant addressed a letter dated 28 August 2025 to the Assistant Commissioner asserting ownership over the consignment. Subsequently, a notice under Section 129(3) CGST Act was issued , proposing penalty on different parameters, including liability of the owner of goods.
The appellant approached the High Court contending that there was no dispute regarding ownership, that relevant documents of title were accompanying the goods, and that continued detention of perishable goods would cause irreparable loss. The appellant expressed willingness to deposit the penalty amount applicable to the owner, without prejudice to its rights in the pending writ petition. The revenue opposed release, disputing ownership and relying upon CBIC Circular dated 31 December 2018, a Single Bench decision in M/s. JJ Traders, and an interim order of the Supreme Court in S.N. Trading Company.
Issue:
Whether, pending adjudication of a writ petition challenging detention under Section 129 CGST Act, perishable goods can be directed to be released to the claimant asserting ownership, upon deposit of the penalty applicable to the owner, when ownership is supported by documents accompanying the goods and no rival claim exists.
Held that:
It was held that the perishable nature of the goods was a significant factor warranting urgent consideration. It noted that the appellant consistently asserted ownership of the seized areca nuts and that no material was placed on record by the revenue to disprove such claim, nor was there any competing claimant.
The Court examined the CBIC Circular dated 31 December 2018, particularly FAQ No. 6, which clarifies that where an invoice or specified document accompanies the consignment, the consignor or consignee should be deemed to be the owner. In the present case, documents of title were seized along with the goods and clearly indicated the appellant as the owner. Accordingly, the Court held that the Circular itself supported the appellant’s claim of ownership.
Distinguishing the reliance placed by the revenue on M/s. JJ Traders, the Court observed that the factual matrix therein involved release of both goods and conveyance, whereas in the present case, only the goods were sought to be released. Similarly, the Supreme Court’s order in S.N. Trading Company was found inapplicable, as that matter involved unresolved questions on ownership, whereas ownership here stood prima facie established.
The Court further held that once ownership is accepted, the appellant’s maximum exposure under Section 129 stood limited to the penalty quantified against the owner, as reflected in the impugned notice itself. Since the appellant expressed readiness to secure this amount, continued detention of perishable goods was unjustified.
Case name: Riya Das Versus Inspector of CGST & CX, Headquarter, Anti Evasion Unit, Siliguri Commissionerate & Ors. dated 09.01.2026
To read the complete judgement 2026 Taxo.online 80
