Detained goods released on bank guarantee while preserving the taxpayer's right to contest the levy and penalty demand.

Detained goods were to be released immediately on the petitioner furnishing a bank guarantee from a nationalised or scheduled bank for the amount demanded. The security was accepted without prejudice to the petitioner's right to contest the levy of tax and penalty, and release of the goods was made conditional only on furnishing the stipulated guarantee. The arrangement preserved the challenge to the detention notice while securing the revenue demand through bank guarantee.

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Issues: Whether the detained goods were liable to be released forthwith on the petitioner furnishing a bank guarantee for the amount demanded.

Analysis: The detention notice was under challenge, and the petitioner offered to furnish security by way of bank guarantee equivalent to the tax demanded, without prejudice to its rights to contest the levy of tax and penalty. The respondent accepted that, on such security being furnished, the goods could be released immediately. The Court therefore directed release of the detained goods upon furnishing a bank guarantee from a nationalized or scheduled bank for the specified amount, while preserving the petitioner's right to contest the demand.

Conclusion: The detained goods were directed to be released on furnishing the stipulated bank guarantee, in favour of the petitioner.

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