Release of detained goods on one-time tax payment while preserving the right to challenge levy and penalty

Detained goods were directed to be released on payment of one-time tax where the assessee offered payment without prejudice to its rights. The detention had arisen from absence of an advance inward way bill, non-reporting at the checkpost, and delivery to an address different from the consignee address, while the petitioner maintained that the transaction was an inter-State sale on which tax had already been paid and that there was no evasion warranting the invoked provision. Release was ordered on the stated payment, and the petitioner's right to challenge the tax and compounding penalty in appropriate proceedings was preserved.

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Issues: Whether the detained goods were liable to be released on payment of one time tax, while preserving the petitioner's right to challenge the tax and compounding penalty.

Analysis: The detention arose from the absence of advance inward way bill, non-reporting at the checkpost, and delivery to an address different from the consignee address. The petitioner asserted that the transaction was an inter-State sale, that tax had already been paid on the relevant legs of the transaction, and that there was no evasion so as to attract the invoked provision. To secure immediate release, the petitioner offered to pay one time tax without prejudice to its rights. The respondent stated that on such payment the goods would be released. The dispute was therefore resolved by directing release of the detained goods on payment of the stated amount, while keeping open the petitioner's right to challenge the levy and penalty in appropriate proceedings.

Conclusion: The detained goods were directed to be released on payment of one time tax of Rs. 90,211, and the petitioner was left free to challenge the tax and penalty separately.

Ratio Decidendi: Detained goods may be ordered to be released on payment of one time tax where the assessee agrees to pay without prejudice, while preserving the right to contest the underlying levy and penalty in accordance with law.

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