Provisional release of seized goods may be conditioned by reasonable security, including personal guarantee, when prior terms are excessive.
Release conditions for seized goods under the U.P. Value Added Tax Act, 2008 were modified after the parties agreed that the earlier security arrangement was too onerous. The Tribunal's direction requiring part cash deposit and the balance by security other than cash and bank guarantee was altered so that the goods could be released on furnishing cash security of Rs. 2 lakhs and security for the remaining amount by the proprietor's personal guarantee. Insistence on fixed deposit receipts was not accepted, and the revised terms were treated as a workable security arrangement for provisional release.
Issues: Whether the security directed for release of seized goods under the U.P. Value Added Tax Act, 2008 required modification, including the form and extent of security.
Analysis: The revision arose from seizure of goods and the consequent order requiring deposit of part of the value in cash and the balance by security other than cash and bank guarantee. The parties ultimately agreed that the cash component should be restricted and that the balance security should be furnished by the proprietor by way of personal guarantee. In view of the joint statement and the acceptance that insistence on fixed deposit receipts was not justified, the earlier direction of the Tribunal was required to be modified to that extent.
Conclusion: The security condition was modified. The goods were directed to be released on furnishing cash security of Rs. 2 lakhs and security for the remaining amount by personal guarantee of the proprietor, instead of the earlier form of security.
Final Conclusion: The revision succeeded only to the extent of modification of the release conditions for the seized goods, with the balance relief being confined to the agreed security terms.
Ratio Decidendi: Where the parties agree that the form and quantum of security for provisional release of seized goods are excessive or inappropriate, the Court may modify the release conditions to ensure a reasonable and workable security arrangement.
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