Undervaluation below the circular threshold bars seizure and security demands; goods must be released after sampling.

Goods seized at a sales tax check-post for alleged undervaluation were held not liable to continued detention or security where the departmental circular provided that seizure was unnecessary if undervaluation was below 50% of market value. The reassessment finding brought the case within that circular, so the authorities were required to release the goods after taking samples and could not insist on security contrary to the prescribed administrative guidance.

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Issues: Whether goods seized at a sales tax check-post could be detained and security insisted upon when the alleged undervaluation was found to be less than 50 per cent of the market value, in the light of the applicable departmental circular.

Analysis: The goods were seized under section 28-A(6) read with section 13-A(6) of the U.P. Sales Tax Act, 1948 on the allegation of undervaluation. On the assessee's representation, the Assistant Commissioner revalued the goods and found that the undervaluation was less than 50 per cent of the market value. The departmental circular dated 13 April 1989 stated that, even where there was a contravention of those provisions, seizure was not required if the undervaluation was below 50 per cent of market value and the goods could be released after taking samples. The recorded finding brought the case within that circular.

Conclusion: The seizure and the demand for security were not justified, and the goods were required to be released after taking samples.

Final Conclusion: The writ petition succeeded to the extent that the seizure order was set aside insofar as it required security and the authorities were directed to release the goods in accordance with the circular.

Ratio Decidendi: Where the admitted factual finding shows that the undervaluation is below the prescribed threshold in the governing circular, the authorities cannot insist on seizure or security contrary to that circular.

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