High Court orders release of sandalwood goods for export on conditions, dismisses demurrage plea, emphasizes prompt compliance.

The High Court directed the release of sandalwood goods for export on payment of 50% of sales tax and a bank guarantee, rejecting demurrage charges. The court dismissed the appellant's plea for demurrage, holding them responsible for the delay in releasing the goods. The respondent's contempt petition led to the eventual release of goods as per court orders, which also directed establishing eligibility for tax benefits under the Central Sales Tax Act. The court emphasized releasing goods without demurrage or penalty, attributing delays to the appellant's actions and directing prompt compliance with court orders.

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Issues:
1. Sales tax demand on sandalwood purchased for export.
2. Release of goods on payment of sales tax and bank guarantee.
3. Contempt petition for non-release of goods.
4. Direction to establish eligibility for tax benefit.
5. Release of goods without demurrage and penalty.
6. Liability for demurrage charges.
7. Responsibility for delay in releasing goods.

Sales Tax Demand on Sandalwood for Export:
The appellant demanded sales tax on sandalwood purchased for export, which was resisted by the respondent citing section 5(3) of the Central Sales Tax Act, 1956. The High Court directed the release of goods on payment of 50% of the sales tax and furnishing a bank guarantee. The goods were eventually released as per the court's orders.

Release of Goods on Payment of Sales Tax and Bank Guarantee:
The High Court directed the release of goods on payment of 50% of the sales tax and furnishing a bank guarantee, which the appellant initially refused to comply with, leading to a contempt petition. Eventually, the goods were released as per the court's orders.

Contempt Petition for Non-Release of Goods:
The respondent filed a contempt petition due to the appellant's failure to release the goods as directed by the High Court. The goods were ultimately released on a specified date as per the court's orders.

Direction to Establish Eligibility for Tax Benefit:
The Division Bench directed the respondent to establish their entitlement to the tax benefit under section 5(3) of the Act concerning the sandalwood purchased in an auction.

Release of Goods Without Demurrage and Penalty:
The State of Tamil Nadu was directed to release the goods without claiming demurrage and penalty, based on the circumstances of the case.

Liability for Demurrage Charges:
The appellant contended that the respondent was liable to pay demurrage charges for the delay in removing the goods. However, the High Court rejected this plea, stating that no demurrage charges were payable as the delay was caused by the appellant's failure to release the goods promptly.

Responsibility for Delay in Releasing Goods:
The High Court ruled that the respondent could not be held responsible for the delay in releasing the goods and that any delay was due to the unreasonable stance taken by the appellant. The court dismissed the appeals and directed the appellants to release the bank guarantee without any further delay.

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