Conditional release of seized goods on cash security, with merits of the seizure dispute left open for assessment proceedings.

Seized goods under the U.P. VAT Act were directed to be released on deposit of cash security, as the Court modified the Tribunal's order without examining the merits of the seizure dispute or alleged evasion. The Court accepted that release could be granted against security and left all substantive issues open for assessment and penalty proceedings. The order therefore provided conditional release of the goods while preserving the revenue authority's power to proceed independently on liability and penalty.

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Issues: Whether the impugned order directing release of the seized goods without security should be modified and whether release could be ordered on deposit of cash security, without adjudicating the merits of the seizure dispute.

Analysis: The goods had been intercepted and seized in proceedings under the U.P. VAT Act and the Tribunal's order releasing them without security was challenged. The Court did not enter into the merits of the alleged evasion or the legality of the seizure. Taking note of the respondent's offer to furnish cash security and the revisionist's stand that release could follow such deposit, the Court considered it appropriate to modify the Tribunal's order and grant release of the goods on security, leaving all substantive issues open for assessment and penalty proceedings.

Conclusion: The order of the Tribunal was modified and the seized goods were directed to be released forthwith on deposit of cash security of Rs. 1 lakh. The matter was not decided on merits.

Final Conclusion: The proceeding resulted in conditional release of the goods in favour of the assessee, while preserving the authority's power to continue with penalty and assessment proceedings uninfluenced by the order.

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