Interim release of detained goods allowed where misclassification and tax evasion allegations required adjudication on merits.

Goods detained at a check post on an allegation of misclassification were directed to be released pending adjudication, because the correctness of the classification and any alleged attempt to evade tax required proper determination on merits. The dealer had declared the goods as packing material under the Kerala Value Added Tax Act, 2003, and the Court treated the immediate issue as interim release rather than final tax liability. Finding a prima facie case for the dealer, it ordered release of the detained goods on execution of a simple bond without solvent sureties, while leaving the substantive adjudication open.

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Issues: Whether goods detained at the check post on the allegation of misclassification were liable to be released pending adjudication.

Analysis: The petitioner was a registered dealer and had declared the goods as packing material under the Kerala Value Added Tax Act, 2003. The dispute turned on whether the goods were correctly classified and whether there was an attempt to evade tax, but those matters required proper adjudication. At the interim stage, the Court found that the petitioner had a prima facie case to deny the alleged offence and that the immediate concern was release of the detained goods, not final determination of tax liability.

Conclusion: The detained goods were directed to be released on execution of a simple bond without solvent sureties, and the adjudication was left open.

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