Gauhati High Court
M/S Shantilal Baid And Company vs The Union Of India And 5 Ors on 22 January, 2026
Author: Soumitra Saikia
Bench: Soumitra Saikia
Page No.# 1/7
GAHC010007872026
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/314/2026
M/S SHANTILAL BAID AND COMPANY
A PARTNERSHIP FIRM, HAVING ITS PRINCIPAL PLACE OF BUSINESS AT
5TH FLOOR, ROOM NO. 512, SHRADHANJALI COMPLEX, OLD KELVIN
CINEMA COMPOUND, TOKOBARI ROAD, FANCY BAZAR, GUWAHATI-
781001, ASSAM, REPRESENTED BY MR. ALOK KUMAR LUNIA, ONE OF
THE PARTNERS OF THE PETITIONER FIRM
VERSUS
THE UNION OF INDIA AND 5 ORS
THROUGH THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF
FINANCE, NORTH BLOCK, NEW DELHI 110 001
2:PRINCIPAL COMMISSIONER
GST AND CENTRAL EXCISE COMMISSIONERATE
GUWAHATI GST BHAWAN
KEDAR ROAD
MACHKHOWA
GUWAHATI
ASSAM 781 001
3:THE ADDITIONAL DIRECTOR GENERAL
OF THE DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI)
GUWAHATI ZONAL UNIT HOUSE NO. 77
RUPKONWAR JYOTI PRASAD AGARWALA PATH NEAR SHANKARDEV
KALAKHETRA
PANJABARI GUWAHATI-781037
4:THE ASSISTANT DIRECTOR OF THE DIRECTORATE GENERAL OF GST
INTELLIGENCE
(DGGI) GUWAHATI ZONAL UNIT
HOUSE NO. 77
Page No.# 2/7
RUPKONWAR JYOTI PRASAD AGARWALA PATH NEAR SHANKARDEV
KALAKHETRA
PANJABARI
GUWAHATI-781037
5:THE SENIOR INTELLIGENCE OFFICER OF THE DIRECTORATE GENERAL
OF GST INTELLIGENCE
(DGGI) GUWAHATI ZONAL UNIT HOUSE NO. 77
RUPKONWAR JYOTI PRASAD AGARWALA PATH NEAR SHANKARDEV
KALAKHETRA
PANJABARI GUWAHATI-781037
6:THE INTELLIGENCE OFFICER OF THE DIRECTORATE GENERAL OF GST
INTELLIGENCE
(DGGI) GUWAHATI ZONAL UNIT
HOUSE NO. 77
RUPKONWAR JYOTI PRASAD AGARWALA PATH NEAR SHANKARDEV
KALAKHETRA
PANJABARI
GUWAHATI-78103
Advocate for the Petitioner : DR. A SARAF, B SARMA,MR P K BORA,MR S J SAIKIA,MR P
BARUAH,MR. A. KAUSHIK,MR. N N DUTTA
Advocate for the Respondent : DY.S.G.I., SC, GST
BEFORE
HONOURABLE MR. JUSTICE SOUMITRA SAIKIA
ORDER
22.01.2026 Heard Dr. Ashok Saraf, learned Senior Counsel assisted by Mr. A. Kaushik and Mr. P.K. Bora, learned counsel for the petitioner. Also heard Mr. S.C. Keyal, learned Standing Counsel, GST assisted by Mr. K. Jain, learned counsel for the respondents.
2. The petitioner before this Court is a trader and is in the business of sale and purchase of various commodities including dried areca nut. During the course of business, the goods which were transmitted in vehicles by the Page No.# 3/7 petitioner came to be detained by the GST authorities. Purportedly in exercise of powers under section 129(1) of the CGST Act, the goods were detained on the ground that they were undervalued and the vehicles along with the areca nut consignment were seized by the GST authorities and detention order dated 14.11.2025 was passed.
3. The learned Senior Counsel for the petitioner submits that this entire action by the respondent authorities is in contravention with the privisions prescribed under the GST Act under section 129 and 130. The learned Senior Counsel submits that the detention orders were passed on the ground that discrepancies in weight after physical verification was noticed and goods weighing 1310 kg were found to be not covered with invoice and EWB. Thereafter, the respondent authorities issued notice under section 130 for confiscation of goods and the levy of penalty. The penalty was calculated along with fine in lieu of confiscation of goods and fine in lieu of confiscation of conveyance amounting to a total of Rs.79,55,156. The learned Senior Counsel referring to the provisions of the GST Act submits that the seizure under section 129 in respect of goods and conveyances in transit is only when the goods are in transit in contravention with the provisions of the Act. Such is not the case in the present proceedings in as much as the goods were duly covered with necessary documents and invoices. According to the respondent authorities, there is a discrepancy in the weight of the materials which the learned Senior Counsel submits that it could have resulted as the areca nut consignment was weighed with the bags in which the consignment is packed and sent in transit. The learned Senior Counsel therefore, submits that besides there being a dispute in the weighment of the goods which have been confiscated, the authorities have not been able to point out any other ground for confiscation of Page No.# 4/7 the said consignment along with the vehicles and that too without following any procedure as contemplated under the Act and the Rules.
4. Dr. Saraf, learned Senior Counsel has referred to a judgement of the Co- ordinate Bench of this Court reported in 2005 3 GLR 425 ( Kamal Kumar Sharma Vs. State of Assam and Ors.) . Referring to the said judgment, the learned Senior Counsel submits that in the case of registered dealers within which category the petitioner also falls where the total quantity of goods in stock or in transit is identifiable and the variety of such goods is also known, the goods cannot be treated as not properly accounted for merely on account of a difference of opinion regarding their sale price. In the considered view of the Court, to do so would amount to doing violence to the scheme contemplated under the Act. Dr. Saraf, learned Senior Counsel has also referred to the judgment of the Gujarat High Court rendered in Narendra Danabhai Daki Vs. State of Gujarat reported in 2025 SCC OnLine Guj 5219 and submits that in order to invoke the severe action of confiscation of goods and conveyances during transit, contravention or infringement has to be one of the highest degree, such as absence of documents or fake or forged documents, absence of details of the dealer, forged E-way bills, complete deceptive, divergence, mismatch of goods, fake registration, etc. He therefore, submits that in so far as the goods of the petitioner are concerned, no such instances have been recorded by the respondent authorities and therefore, the impugned seizure, detention and contemplated confiscation of these goods are contrary not only to the provisions of the Act but also to the judgments and orders passed by this Court as well as by the High Court of Gujarat. He therefore, submits that these proceedings be stayed as the consignment is perishable in nature, petitioner's consignment be released and necessary documents, etc., sought for by the petitioner be Page No.# 5/7 furnished to the petitioner so that appropriate reply can be filed in response to the show cause notices issued. Dr. Saraf, learned Senior Counsel therefore, submits that during the pendency of the matters, adequate interim protection be granted by directing the respondents to release the confiscated consignment of the areca nut seized by the respondent authorities along with the vehicles.
5. Mr. S.C. Keyal, learned Standing Counsel, GST on the other hand submits there is no infirmity seizure in the contemplated confiscation as the procedure prescribed under Section 129, 130 and 131 has been followed. The show cause notice has been issued, the petitioner has not replied to, rather has sought for further time.
6. Having heard the learned counsel for the parties and upon perusal of the pleadings available on record and upon due perusal of the sections i.e. Section 129 and 131 of the GST Act 2017, as also the judgments pressed into service by the learned counsel for the petitioner, this Court is of the view that the matter will require consideration therefore, at this stage, notice be issued. Accordingly, let notice be issued returnable within four weeks.
7. Mr. S.C. Keyak, learned Standing Counsel, GST appears and represents all the respondents, therefore, notices waived. However, extra copies be furnished within 25.02.2026.
8. Meanwhile, considering the submissions made by the petitioner and more particularly, the judgments pressed into service wherein it has been clearly held that difference of opinion in respect of weighment or weight of the consignment ought not to be the sole ground for seizure and contemplated confiscation of the goods in question, more particularly, when these goods are perishable in Page No.# 6/7 nature. It is also noticed that there is no allegation against the writ petitioner that these goods in transit were not supported by adequate documents and/or they were fake forged documents or there was absence of the details of the dealers or forged E-way bills or are completely deceptive, divergent or complete mismatch of the goods, and/or fake registrations. This Court is therefore, of the prima facie view that subject to furnishing of adequate bank guarantee before respondent No.2 to cover the demand of tax short paid namely Rs.1,80,799.00 respectively for CGST and for SGST amounting to a total of Rs.3,61,598.00, by the petitioner, the consignment of areca nuts along with the vehicles No. WB65E0086 and AS23BC9796 shall be released forthwith.
9. It was further submitted that pursuant to the show cause notice issued, the petitioner had sought for the necessary documents. However, as on date, all such documents have not been supplied. The documents as prayed for by the petitioner and as intimated to the department vide communications dated 09.01.2026 and 16.01.2026 are stated to be under examination by the department. Upon receipt of the said documents, the petitioner undertakes to file the necessary reply within a period of two weeks thereafter.
10. Mr. S.C. Keyal, learned Standing Counsel, GST submits that under Section 130 there is no provision to receive bank guarantee therefore, the petitioner be directed to pay the amount in cash. Such contention of the respondent at this stage cannot be accepted as the Court has passed interim order upon prima facie satisfaction and therefore such direction to the petitioner to pay amount in cash to the exchequer may amount to accepting that the petitioner is liable to pay the tax. Nevertheless the interest of the revenue are also well secured in view of the order of this Court that the demand raised of the short paid tax by Page No.# 7/7 the department shall be duly secured by the bank guarantee directed to be submitted by the petitioner and which will be renewed from time to time.
11. Accordingly, let this matter be listed on 25.02.2026.
JUDGE Comparing Assistant