SC Seeks Detailed Affidavit From Trader After GST Dept. Fails to Release Seized Areca Nuts Despite Prior Orders

The Supreme Court has sought a comprehensive affidavit from a partner of a trading firm after noting that the Central GST authorities failed to comply with its earlier directions ordering release of seized consignments of areca nuts and the vehicles transporting them. The bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan expressed displeasure over the department’s refusal to release the goods despite the petitioners depositing the amount mandated under its August 11, 2025 order. The matter, arising out of Special Leave Petition relating to the seizure of two truckloads of dry areca nuts in May 2025 by the GST Department, which alleged discrepancies in documentation, including the E-Way Bill and weighment details. On 11 August 2025, the Supreme Court had granted exemption applications and directed issuance of notice subject to the petitioners depositing ₹5,98,000 per case with the Registry. The Court had made it clear that upon such deposit, the department must refrain from auctioning the seized areca nuts. Subsequently, on 13 October 2025, the Supreme Court further directed that the entire consignment of areca nuts and the two intercepted trucks (UP14HT 7566 and AP39UN 9869) be released to the petitioners on furnishing appropriate bonds. The Court noted that the goods were perishable and had remained in the custody of the GST Department since 16–17 May 2025. However, the department did not release the goods even after the monetary deposit was made. This prompted the Court, on 14 November 2025, to summon the Commissioner, CGST & CX, Siliguri Commissionerate, to appear online. During the hearing, the revenue argued that under Rule 140 of the CGST Rules, 2017, seized goods can be released only upon execution of a bond equivalent to the full value of the goods, and furnishing of a bank guarantee equivalent to applicable tax, interest, and penalty. The department maintained that the goods were valued at ₹59.80 lakh, a figure strongly disputed by the petitioners. It contended that the release could not be permitted on a simple bond as suggested by the petitioners. The department justified the seizure by pointing to several discrepancies, including excess goods found; E-Way Bill issued before weighment, making documentation suspicious; and weight mismatch between invoice and weighment slip. These discrepancies led the officers to deem the E-Way Bill “doubtful,” resulting in the interception and seizure under Section 129 of the CGST Act. Although the petitioners argued that they were unaware of any contravention, the Bench noted that the MOV-07 noticeand MOV-09 penalty order dated June 2, 2025 clearly indicated the alleged violations. The Court has now sought detailed information from the partnership firm, specifically: How the consignment was procured From whom the goods were purchased For whom the goods were being procured Where the consignment was intended to be delivered Clarification on the discrepancies noted in the Section 129(3) notice Purchase price paid, if the goods were procured for supplying to another party The Bench said it would proceed further only after these explanations are placed on record. The Supreme Court directed that a partner of the firm must file the affidavit within one week, with a copy also furnished to the revenue’s counsel, Mr. V. Chandrashekara Bharathi, to enable him to obtain instructions. The matter will next be heard on 26 November 2025. Case Details Case Title: S.N. TRADING COMPANY & ANR. Versus UNION OF INDIA & ORS. Case No.: Special Leave to Appeal (C) No.22173/2025 Date: 19-11-2025 Click Here To Read Order

SC Seeks Detailed Affidavit From Trader After GST Dept. Fails to Release Seized Areca Nuts Despite Prior Orders

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