Authorities must release detained goods in transit upon payment of the penalty prescribed under the statute when the owner comes forward, provided there is no compelling evidence to refute such ownership. The statutory mechanism is intended to ensure compliance rather than create a permanent lien over goods.

JUDGMENT :

Aniruddha Roy, J.

Facts:

1. The petitioner as a consignor claims to have supplied and transported Dried Areca Nuts (hereinafter, the nuts) for a quantity of 34,650 kgs.pursuant to the order placed by one M/s. Barman Tradecomm at New Delhi (hereinafter, the consignee).

2. During the transit the truck, through which the goods were transported, was intercepted by the CGST Authority and the consignment and the conveyance had been detained.

3. The revenue authority had issued a show-cause notice dated March 30, 2026, annexure P5 at page 33 to the writ petition under Section 129(3) of 2017 Act read with Section 20 of IGST Act, 2017.

4. Petitioner has submitted its reply dated April 2, 2026, Annexure P6 at page 40 to the writ petition.

5. The revenue authority then passed its order dated April 6, 2026 at page 46 to the writ petition and then issued the demand dated April 6, 2026, Annexure P7 at page 44 to the writ petition for a total sum of Rs.51,87,380/- for 35,530 kgs of nuts and additionally on account of conveyance a sum of Rs.2,00,000/-.

6. Page 50 of the writ petition shows that, the demand in terms of Section129(1)(a) of the 2017 Act is for a sum of Rs.5,18,738/- and the demand in terms of Section 129(1)(b) of 2017 Act is for Rs.51,87,380/-.

7. At this juncture, claiming release of the consignment in terms of Section129 of the 2017 Act the petitioner has filed the instant writ petition.

Submissions:

8. Mr. Akshat Agarwal, learned Advocate (VC), appearing for the writ petitioner, at the threshold has referred to a circular dated December 31, 2018 issued by the Commissioner (GST), Annexure P8 at page 54 to the writ petition and submits that, the said circular has clarified that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner.

9. Referring to the said show-cause notice dated March 30, 2026 learned Advocate for the petitioner submits that, the stand of the revenue is clear that, the relevant tax invoices and the e-way bills were checked up though the prima facie finding of the revenue authority is that, the documents tendered appear to be defective. The genuineness of the goods in transit and tendered documents required further verification. He submits that, this stand of the revenue authority would show that, the relevant documents were there but at their correctness was disputed.

10. Learned Advocate for the petitioner then refers to the provisions laid down under Section 129(1)(a) from the 2017 Act and submits that, the statute provides where the owner of the goods comes forward for payment of the penalty determined by the revenue, on payment of penalty equals to 200%, the goods may be released. In the instant case, the penalty allegedly fixed under 129(1)(a) of the 2017 Act is Rs.5,18,738/-. The petitioner is ready and willing to pay the said amount and get the consignment released as the goods under the consignment are perishable in nature and if the goods are not allowed to be released, the same will suffer its natural decay, when the rights and interests of the petitioner will be seriously jeopardized. In support, he has relied upon a judgment of the Hon’ble Division Bench dated January 9, 2026, In the matter of : Riya Das Vs. Inspector of CG