The central government and the army rubbished the allegations, saying too much was being read into a routine exercise.
An undaunted Trinamool Congress sent its senior ministers on a sit-in protest at the Raj Bhavan in Kolkata and videos of the army deployment were also forwarded to President Pranab Mukherjee.
Banerjee remained in the secretariat Nabanna where she held parleys with top civil and police officers.
In the Lok Sabha, Defence Minister Manohar Parrikar said the army was conducting a routine exercise and the state government and the police knew about it in advance.
"This has been continuing since last 15-20 years. This exercise was conducted last year too between November 19-21," Parrikar said.
The minister said it was earlier decided that the exercises would take place between November 28-30. "But police urged the army to shift the dates as there was a shutdown on November 28. So it was decided that the exercises would take place between December 1-3."
He also accused Banerjee of politicising the issue.
"It is saddening that a routine exercise has been made a controversy now. This is politics in frustration," Parrikar said.
In Kolkata, the Eastern Command showed papers detailing the correspondence between the army and the local police on the issue.
"We deny all charges with all contempt," said General Officer Commanding Major General Sunil Yadav.
The army also termed as "baseless" Banerjee's charge that army personnel were collecting money from vehicles.
He said the soldiers were carrying out routine annual data collection exercises on the availability of load carriers at all the major entry points in various states.
Banerjee said on Thursday that she would not leave till the army was withdrawn. She accused the central government of "deploying the army" along a highway toll plaza at the second Hooghly Bridge, about 500 metres from the secretariat Nabanna in neighbouring Howrah district.
"I'll keep vigil to protect the democracy, to protect my democratically elected government," she said.
Shortly after midnight, the Eastern Command said the army has been asked to withdraw from the toll plaza near Nabanna as it had already collected the data it required.
Past 2 a.m., Banerjee -- holding her third round of media conference since Thursday evening -- reiterated she would spend the night at Nabanna, arguing the army may be back.
The drama unfolded on Thursday evening, when Banerjee alleged the army has been deployed at the Dankuni and Palsit toll plazas on National Highway 2 (connecting Delhi and Kolkata) without informing the state government.
Demanding to know whether a military coup has taken place, she said: "The motive is political, vindictive, unconstitutional, unethical and undemocratic."
On Friday, the issue was raked up in the Rajya Sabha and the Lok Sabha.
The Rajya Sabha was also adjourned over the issue after opposition members shouted slogans and compared Prime Minister Narendra Modi to Hitler.
Leader of Opposition Ghulam Nabi Azad raised the issue in the House.
"In West Bengal, the army has taken over toll plazas at 19 places. The state Chief Secretary, state administration or the state Director General of Police (DGP) were not given any information about this. We are unable to understand what is this," Azad said.
Trinamool Congress member Sukhendu Sekhar Roy and BSP chief Mayawati also joined Azad.
Roy said it was a central government attempt to instil fear. Mayawati dubbed the move an "attack on the federal structure" of the nation.
In the Lok Sabha, Trinamool leader Sudip Bandopadhyay led the opposition members and trooped near the Speaker's podium and shouted slogans against the central government.