Case Law Details
S.N. Trading Company & Anr. Vs Union of India & Ors. (Supreme Court of India)
The dispute arose from the detention of a consignment of areca nuts being transported in a vehicle that was intercepted on 16 May 2025 in Jalpaiguri District. Following examination of the goods and generation of a weighment slip, the adjudicating authority concluded that there was a discrepancy of 420 kilograms between the declared quantity and the quantity determined after deducting the vehicle’s unladen weight from the gross weight.
The adjudicating authority initiated proceedings and passed a penalty order. Three allegations were made against the appellants: (i) discrepancy in the quantity of goods, (ii) failure to produce any bill of supply or tax invoice, and (iii) failure to produce proof of payment, either in full or in part.
Read Calcutta HC Judgment in this case: Calcutta HC Dismissed GST Appeal as Effective Alternative Remedy Was Available
The appellants challenged the penalty order through a writ petition. The Single Bench of the Calcutta High Court declined to entertain the petition on the ground that an effective statutory appellate remedy was available. The Court clarified that if an appeal was filed, it would be decided independently and without being influenced by any observations made in the writ proceedings.
Aggrieved by that decision, the appellants filed an intra-court appeal. The Division Bench observed that the challenge involved disputed questions of fact concerning the correctness of the penalty order, including issues relating to the alleged weight discrepancy. The Court held that such matters were appropriately to be examined by the statutory appellate authority and agreed with the Single Bench that the writ petition should not be entertained when an efficacious alternative remedy existed.
Accordingly, the Division Bench dismissed the appeal and directed the appellants to pursue the statutory appellate remedy. However, the Court also considered the practical consequences of continued detention of the goods and the vehicle.
The Court observed that retention of the vehicle by the department could lead to deterioration and prejudice the owner. It further noted that the detained goods, namely dried areca nuts, were perishable in nature and might lose value before appellate proceedings concluded. Therefore, while upholding the requirement to pursue the statutory appeal, the Court directed the department to conduct a public auction of the detained areca nuts. The appellants were permitted to participate in the auction. The sale proceeds were directed to be retained by the department, preferably in an interest-bearing account, subject to the final outcome of the appeal.
Regarding the vehicle, the Court ordered its release upon payment of Rs. 50,000 and furnishing a bond for Rs. 1,50,000, undertaking to produce the vehicle whenever required. The auction of the areca nuts was directed to be completed preferably within 45 days, and the vehicle was to be released within seven days after compliance with the conditions.
The appellants thereafter approached the Supreme Court by filing Special Leave Petitions. After hearing counsel and examining the materials on record, the Supreme Court found no good ground to interfere with the orders passed by the High Court. Consequently, the Special Leave Petitions were dismissed. The Court also disposed of all pending applications.
As a result, the High Court’s decision directing the appellants to avail the statutory appellate remedy, while permitting auction of the goods and conditional release of the vehicle, remained undisturbed.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we find no good ground to interfere with the impugned orders passed by the High Court.
2. The Special Leave Petitions are, accordingly, dismissed.
3. Pending applications, if any, also stand disposed of.
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