Seized goods release on indemnity bond upheld where cash security was unnecessary and tax liability remained recoverable in law.

A seized-goods release condition requiring deposit of 10% of the estimated value was found unnecessary where the dealer was registered and any eventual tax or penalty liability could be recovered according to law. The court noted that disputed issues, including the applicability of Section 50, could be examined at the appropriate stage, so insistence on cash security was not justified. The release condition was modified, and the goods were directed to be released on furnishing an indemnity bond for the disputed amount, subject to the authorities' final orders.

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Issues: Whether the condition requiring deposit of 10% of the estimated value of seized goods for their release was justified, and whether the goods should instead be released on furnishing an indemnity bond.

Analysis: The revisionist was a registered dealer, and the Court noted that any ultimate liability towards tax or penalty could be recovered in accordance with law. The Court also observed that the authorities could examine the disputed questions, including the applicability of Section 50, at the appropriate stage. In the circumstances, insistence on cash security was not found necessary for release of the goods.

Conclusion: The condition of depositing 10% cash security was modified, and the seized goods were directed to be released on furnishing an indemnity bond for the disputed amount, subject to the final orders of the authorities.

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