Calcutta High Court Clarifies Release of Perishable Goods Under Section 129 of CGST Act

The Calcutta High Court has clarified that a person whose ownership of detained goods has not been established cannot claim release under Section 129(1)(a) of the CGST Act merely as an owner. However, where the goods are perishable, the statutory mechanism under Section 129(1)(b) may still provide a route for seeking their release.

Case Background

In Ratul Talukdar v. Union of India & Ors., MAT No. 31 of 2026 with CAN No. 1 of 2026, the Division Bench of the Calcutta High Court considered an intra-court appeal concerning goods detained and seized by CGST authorities during transit. The judgment was delivered on 24 July 2026 by Justice Shampa Sarkar and Justice Smita Das De.

Ratul Talukdar claimed to be the consignor and owner of the detained goods. However, the adjudicating authority had found that he was not the owner and that the actual owner could not be traced.

The Single Judge had directed the authorities to auction the goods and permitted the appellant to participate in the auction. The appellant challenged this direction before the Division Bench.

What Does Section 129 Provide?

Section 129 of the Central Goods and Services Tax Act, 2017 deals with detention, seizure and release of goods and conveyances during transit where specified contraventions are involved.

The provision distinguishes between situations where:

• The owner of the goods comes forward; and
• The owner does not come forward.

This distinction became central to the dispute before the High Court.

High Court's Findings

The Division Bench held that the appellant could not claim release under Section 129(1)(a) because the adjudicating authority had already found that he was not the owner of the goods.

However, the Court took into account the fact that the goods were perishable. It held that a non-owner could seek release under the alternate mechanism contemplated by Section 129(1)(b).

The Court also found the direction requiring the appellant to participate in the auction to be unsustainable. Consequently:

• The direction to auction the goods was set aside.
• The requirement that the appellant participate in the auction was also set aside.
• The appellant was permitted to approach the authorities seeking release under Section 129(1)(b).
• The question of release remained subject to the applicable statutory conditions and the final outcome of the underlying proceedings.

The Court separately left the jurisdictional dispute concerning detention and seizure in the context of the inter-State supply to be considered in the pending writ proceedings.

Why This Judgment Matters for Businesses

The ruling is particularly relevant for businesses transporting perishable goods, where prolonged detention can result in substantial commercial loss.

Taxpayers and transporters should:

• Maintain proper invoices and e-way bills during transportation.
• Preserve documents establishing ownership and the commercial chain of the goods.
• Respond promptly to proceedings under Section 129.
• Where goods are perishable, specifically highlight their nature and limited shelf life before the tax authorities.
• Examine whether an available statutory release mechanism can be used instead of allowing the goods to deteriorate or proceeding directly to auction.

The judgment does not mean that every non-owner is automatically entitled to release of detained goods. The facts of the case, the nature of the goods and the statutory requirements for release remain important.

Conclusion

The Ratul Talukdar decision provides useful guidance on the treatment of perishable goods detained under Section 129 of the CGST Act. While ownership remains important for seeking release under Section 129(1)(a), the Court recognised an alternative statutory route under Section 129(1)(b) where the goods are perishable.

Businesses facing detention of goods should therefore examine the applicable statutory provisions immediately rather than allowing perishable inventory to lose value during prolonged proceedings.

For expert guidance on this topic, contact your tax professional today.