Perishable Areca Nuts Released Despite GST Irregularities

Case Details: Damroo Enterprise vs. State of West Bengal - [2025] 181 taxmann.com 490 (Calcutta)

Judiciary and Counsel Details

Om Narayan Rai, J.
Rajdeep Mazumder, Mayukh Mukherjee, Supriyo Dutta & Ms Sagnika Banerjee for the Petitioner.
Tanoy Chakraborty & Saptak Sanyal for the Respondent.

Facts of the Case

The petitioner, a trader engaged in the sale of areca nuts, challenged detention and penalty imposed on its consignment during interstate transit. It contended that the consignment was perishable, that multiple e-way bills and alleged discrepancies in consignor identity and invoices did not justify penalty. It was submitted that weighment evidence did not conclusively establish irregularity. The Department of Revenue maintained that e-way bills were generated 36 minutes apart for locations 266 km apart, the documents were dubious, the movement was continuous, and the penalty was justified. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that exceptional writ grounds were absent and factual disputes regarding penalty and document irregularities required appellate scrutiny under Section 107 of the CGST Act. The Court interpreted that Section 129 applied only where documents were genuine and could not protect dubious transactions. It concluded that penalty under Section 129(1)(b) was justified. Considering the perishability and short shelf life of the areca nuts, the Court directed the release of both goods and conveyance on payment and on furnishing a bank guarantee securing the balance, to be completed within three working days.

List of Cases Reviewed

Shekhar Kumar @ Shekhar Bagaria v. State of West Bengal [2025] 174 taxmann.com 233 (Calcutta) (para 23)
Goutam Bhowmik v. State of West Bengal [2024] 158 taxmann.com 399/83 GSTL 155 (Calcutta) (para 24)
Ashok Sharma v. State of West Bengal [2025] 171 taxmann.com 682/108 GST 538/95 GSTL 354 (Calcutta)/(FMA 136 of 2025) decided on February 11, 2025 (para 25)
Jagannath Trading v. State of West Bengal [2025] 173 taxmann.com 900/98 GSTL 569 (Calcutta) (para 26) distinguished