Nishu v. The Union of India & ors

GST update /2026-27/0022

GST UPDATE

Writ Petition No.: 1392 of 2026

Court: High Court of Calcutta

Case Title: Nishu v. The Union of India & ors.

Outcome: Appeal was allowed and remanded back to the proper officer.

Judgement Date: 07.04.2026

BRIEF FACTS OF THE CASE:

Petitioner is a sole proprietorship firm named as M/s Sunshine Enterprises. Revenue Department alleged that the petitioner sold 480 cartons of pan masala to M/s Maa Kali Traders located in West Bengal on 15.12.2025. The goods were transported through a vehicle carrying the requisite documents i.e. tax invoice, e-way bill and consignment note. However, the said vehicle was intercepted and detained along with the goods on 18.12.2025 by issuing FORM MOV-02. Thereafter, petitioner, who claimed to be the owner, moved a letter dated 07.01.2026 seeking release of vehicle and goods. Consequently, department official on 08.01.2026 issued a letter to the petitioner seeking for the personal attendance of the petitioner. On 12.01.2026, petitioner sought permission to be represented through her advocate i.e. authorised representative. A letter was sent dated 14.01.2026 by the department in which it was informed to the petitioner that her firm was a non-existent and bogus entity on the basis of a report received from GST authority in Uttar Pradesh. Department asked for personal attendance of the petitioner for further proceedings. Thereafter, petitioner preferred a writ petition before Calcutta High Court.

QUESTION BEFORE HON’BLE COURT:

• Whether seizure stands valid where there is no formal seizure order passed by the concerned proper officer?

• Whether revenue officials are required to act differently and more rationally manner within statutory timeframe to avoid loss to the taxpayer where goods are of perishable nature?

• Whether it is mandatory for a person to appear in person instead of being represented through a authorized representative?

• Whether petitioner should be granted an opportunity to pay and can remove detention on the goods and vehicle?

• How to determine the deemed owner of the detained goods under the purview of circular issued by the Revenue Department?

BRIEF ARGUMENTS BY PETITIONER:

Petitioner submitted following contentions: -

• Petitioner contended that it is ready and willing to take release of the goods by paying the applicable penalty in terms of Sec. 129(1)(a) of the CGST Act 2017.

• Further, petitioner requested for permission to appear and be represented through its authorised representative.

BRIEF ARGUMENTS BY REVENUE DEPARTMENT:

Revenue Department contended that:

• Revenue officials contended that petitioner failed to appear despite several requests and therefore, the writ petition should not be looked into.

• Department submitted that they found requirement of personal appearance of the petitioner on the basis of report received from GST authority in Uttar Pradesh.

• Further, department contended that consignee moved a letter dated 30.03.2026, in which it was requested not to release the goods and vehicle without his consent. Consignee further intimated that he may appear before the respondent authorities.

• Revenue Department submitted that proceedings could not be carried forward as the petitioner failed to appear personally. The personal appearance of the petitioner was required as there was doubt regarding the ownership of goods.

FINDINGS & JUDGEMENT:

Following are the findings of the Court in the instant case:

• Hon’ble Court observed that subsequent to issuance of Form MOV-02, no formal order of seizure or detention has been passed by revenue authorities.

• Court observed that there was no proper dealing by the revenue authorities in the matter, as the goods were perishable in nature and the authorities should have proceeded within the statutory time frame prescribed under the CGST Act, 2017 and the rules made thereunder.

• In continuation of above, Hon’ble Court observed that a period of more than four months has elapsed since the inception of the vehicle, but no formal order for detention has been passed.

• Court observed that a circular dated 31.12.2018 has already been issued by the Department of revenue, which clarified that where there is issue regarding the identification of owner as per Section 129(1) of CGST Act. As the invoices clearly indicated the name of the firm of the petitioner and the consignee of the goods i.e. M/s Maa Kali traders. Therefore, by referring to the circular referred above, the instant case is covered in the situation where invoice was accompanied by the vehicle. Hence, proper office ought to have determined ownership in view of the circular and treated consignor/consignee as the deemed owner.

• Further, it was observed that Section 116 of the CGST Act 2017 expressly permits a person to appear before proper officer, as appointed in connection with the proceedings through an authorised representative.

• Therefore, it was held that department authorities should fix a hearing on 10.04.2026 and the petitioner should be allowed to be represented through an authorised representative. Furthermore, there shall be no requirement of serving further notice to the petitioner.

• Court held that petitioner should be provided with the right to deposit the amount in terms of Section 129(1)(a) of the CGST Act 2017, without prejudice to her rights and contentions. In view of above, it was held that concerned proper officer is required to Sec. 129(5) of the CGST Act within 48 hours. Furthermore, in the event where such payment made by the petitioner has been accepted, than the seized vehicle and goods should be released.

Thus, it was held that the writ petition by the petitioner should be allowed and an opportunity of being heard should be provided to the Petitioner. Further, an option to pay the tax should be provided to the petitioner

Various Sections and Rules referred in the instant case:

Sec. 116, Sec. 129(1)(a) and Sec. 129(5) of CGST Act, 2017

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