Release of seized goods follows compliance with stay conditions and adequate security protecting revenue interests.

Seized goods were required to be released once the assessee complied with the appellate stay conditions by depositing 15 per cent of the penalty in cash and furnishing security for the balance, because the revenue's interest was then adequately protected. Continued detention after compliance was held unjustified, subject to the security furnished being acceptable to the assessing authority. The goods were therefore directed to be released forthwith, and further retention could not continue after satisfaction of the stay terms.

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Issues: Whether the seized goods were liable to be released after the petitioner complied with the appellate stay order by depositing 15 per cent of the penalty in cash and furnishing security for the balance amount.

Analysis: The security required for release of seized goods is intended to protect the revenue against possible tax and penalty liability. Once the penalty order had been passed and the Tribunal had granted partial stay by directing deposit of 15 per cent of the penalty in cash and security for the remaining amount, and the petitioner had complied with those directions, the revenue interest stood sufficiently safeguarded. In such circumstances, continued detention of the goods was unjustified, subject to the security furnished being acceptable to the assessing authority.

Conclusion: The seized goods were directed to be released forthwith, provided the security furnished by the petitioner was to the satisfaction of the assessing authority.

Final Conclusion: The writ petition succeeded and the seizure could not be continued after compliance with the stay conditions, as the revenue stood protected by the security furnished.

Ratio Decidendi: Where the assessee complies with the stay conditions and furnishes adequate security protecting the revenue, seized goods should be released and further retention is unwarranted.

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