The Calcutta High Court ruled on a case involving the detention of goods under the CGST Act, where the ownership of the goods was claimed by the consignor, Ranjeet Kumar Poddar. Poddar had transported dried areca nuts to New Delhi, but the goods were intercepted by CGST authorities, who detained them and issued a notice under Section 129(3) of the CGST Act. The authorities demanded a significant sum, raising issues about ownership and the authenticity of the documents.
Poddar approached the court for the release of the goods, asserting his ownership and willingness to pay the penalty under Section 129(1)(a). The main issue was whether the goods could be released when ownership was disputed, yet the department lacked concrete evidence against Poddar's claim. The court noted that Section 129 provides a complete framework for dealing with such situations, emphasizing the release of goods upon penalty payment.
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The court found no tangible evidence from the department to contest Poddar's ownership claim. It ruled that mere allegations were insufficient to withhold the benefits of Section 129(1)(a). The goods were ordered to be released upon penalty payment, with the department retaining the right to pursue recovery if necessary. The decision underscores the legislative intent to prevent indefinite detention of goods and facilitate their release when statutory conditions are met.
Order Date - 14 May 2026
Parties: Ranjeet Kumar Poddar Vs Assistant Commissioner of CGST & CX Headquarter, Anti Evasion Unit, Siliguri Commissionerate and Anr.
Facts -
- Ranjeet Kumar Poddar, as consignor, supplied and transported 34,650 kg of dried areca nuts to M/s Barman Tradecomm, New Delhi, supported by tax invoices and e-way bills.
- During transit, the CGST authorities intercepted the vehicle and detained both the goods and conveyance, subsequently issuing a show cause notice under Section 129(3) of the CGST Act.
- The department passed an order demanding ₹51,87,380 in respect of the goods and ₹2,00,000 relating to the conveyance, alleging issues regarding ownership, quantity, quality of goods, and authenticity of documents.
- The petitioner approached the Calcutta High Court seeking release of the detained consignment, contending that he was the owner/consignor and was willing to pay the penalty applicable under Section 129(1)(a).
Issue -
- Whether detained goods can be released under Section 129(1)(a) of the CGST Act when the consignor claims ownership but the department disputes ownership without producing concrete evidence.
Order -
- Section 129 is a complete code for detention and release of goods in transit. The Court observed that the statute expressly provides for release of detained goods upon payment of the prescribed penalty, either by the owner or by a person other than the owner. The legislative intent is to facilitate release rather than continue detention indefinitely.
- Detention cannot be converted into a charge or lien over the goods. Once the conditions prescribed under Section 129 are fulfilled, the authorities are obligated to release the goods. If any demand ultimately survives adjudication, the law separately provides recovery mechanisms to recover such dues.
- Ownership dispute was not supported by any tangible material. Although the department questioned ownership, quantity, quality, and supporting documents, neither the show cause notice nor the demand order identified any concrete evidence proving that the petitioner was not the owner. Mere allegations were insufficient to deny the benefit of Section 129(1)(a).
- Adjudication of ownership is not relevant at the release stage where no contrary evidence exists. Since the petitioner consistently asserted ownership and the goods were perishable in nature, the Court held that release should not be withheld. The consignment was directed to be released upon payment of penalty under Section 129(1)(a), leaving the department free to pursue recovery if the demand later attains finality.
