The High Court at Calcutta addressed a case where Nishu, proprietor of M/s Sunshine Enterprises, faced issues with the GST authorities during the transportation of pan masala from Kanpur to Howrah. Despite having all valid documents, the goods and vehicle were detained, and only an MOV-02 form was issued without a formal seizure order. The authorities demanded Nishu's personal appearance, doubting the firm's genuineness, and did not allow representation through an advocate, contrary to the provisions of Section 116 of the CGST Act.
The Court strongly criticized the GST authorities for detaining the goods for over four months without issuing a formal seizure order, which is a violation of statutory timelines under GST law. It emphasized the importance of determining the ownership of goods based on the accompanying documents like invoices and e-way bills, as per the CBIC circular, rather than harboring unnecessary doubts. The Court also highlighted that insisting on Nishu's personal appearance was unjustified since legal representation through an advocate is permissible.
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Given the perishable nature of the goods and the procedural delays, the Court ordered that the authorities conduct a hearing promptly, allow representation through counsel, and pass a reasoned order within strict timelines. They were also directed to ensure the lawful release of goods upon payment under Section 129.
Order Date - 07 April 2026
Parties: Nishu (Proprietor of M/s Sunshine Enterprises) Vs Union of India & Others (GST Authorities)
Facts -
- Nishu, proprietor of Sunshine Enterprises, sold pan masala worth ₹36.24 lakhs and transported it from Kanpur to Howrah with all valid documents.
- During transit, GST authorities intercepted the vehicle and detained both goods and vehicle but only issued MOV-02 without passing any formal seizure order.
- Despite repeated requests for release and permission to appear through an advocate, authorities insisted on personal appearance citing doubts about the firm's genuineness.
- Meanwhile, even after more than four months, no proper proceedings were completed, leading the petitioner to approach the High Court for relief.
Issue -
- Whether GST authorities can detain goods indefinitely without passing a formal seizure order?
Order -
- The Court strongly disapproved the conduct of authorities in detaining goods for over four months without passing a formal seizure order, emphasizing that such delay violates statutory timelines prescribed under GST law and reflects procedural lapse.
- It clarified that ownership of goods must be determined based on accompanying documents like invoices and e-way bills, as per the CBIC circular, rather than raising unnecessary doubts without proper inquiry.
- The Court held that insisting on personal appearance of the petitioner is unjustified, as Section 116 of the CGST Act clearly allows representation through an authorized representative, including an advocate.
- Considering the perishable nature of goods and procedural delay, the Court directed authorities to conduct hearing promptly, allow representation through counsel, and pass a reasoned order within strict timelines, ensuring lawful release upon payment under Section 129.
