Goods Accompanied by Specified Documents Entitle Consignor to Release Under Section 129(1)(a) as Deemed Owner

The petitioner, a consignor, supplied 34,650 kgs of Dried Areca Nuts to a consignee in New Delhi

During transit, the truck was intercepted by CGST authorities, who detained the conveyance and goods on the ground that the documents (tax invoices and e-way bills) appeared defective and required verification

A show-cause notice was issued under Section 129(3) of the CGST Act, 2017

Subsequent to the petitioner’s reply, the revenue authority passed an order and issued a demand for Rs. 51,87,380/- under Section 129(1)(b) of the Act, treating the owner as "not coming forward"

The petitioner moved the High Court seeking release of the perishable goods upon payment of a lower penalty of Rs. 5,18,738/- as per Section 129(1)(a), asserting his status as the owner

1. Whether the petitioner should be treated as the "owner" of the goods to qualify for the penalty regime under Section 129(1)(a) of the CGST Act, 2017

2. Whether the Revenue can deny the release of goods under Section 129(1)(a) based on disputed ownership when no contrary claimant exists

Section 129 of the CGST Act, 2017, which distinguishes between the release of goods when the owner comes forward (200% penalty on tax) under clause (a), and when the owner does not come forward (higher penalty based on goods' value) under clause (b)

Central Board of Indirect Taxes and Customs (CBIC) Circular dated December 31, 2018, which clarifies that if an invoice/document accompanies the goods, the consignor or consignee should be deemed the owner

The court also distinguished S.N. Trading Company v. Union of India regarding the burden of proof for ownership

The court reasoned that taxing statutes must be interpreted strictly and literally

The court observed that the show-cause notice itself identified the petitioner as the 'consignor' and the third party as the 'consignee,' and though the Revenue disputed the genuineness of documents, it produced no material evidence identifying any other person as the actual owner

Relying on the 2018 Circular, the court held that the presence of invoices naming the petitioner established a "deemed ownership" for the purpose of Section 129

The court found that the legislative intent of Section 129 is to facilitate the release of goods upon payment of penalty rather than creating a permanent lien, especially for perishable items like areca nuts

Adjudication on the valuation or validity of documents can be resolved in a statutory appeal, and the Revenue's interest is protected as it can initiate recovery proceedings if the final demand is upheld

The court directed the Revenue to release the goods within three clear days of the petitioner depositing the penalty amount of Rs. 5,18,738/-; the petitioner was directed to file a statutory appeal within three weeks; and it was further clarified that the release of the consignment is independent of the penalty payment for the conveyance by its owner