High Court Orders Release of Seized Goods Upon Bank Guarantee Submission

The Allahabad High Court directed the release of seized goods and vehicle upon submission of a Bank Guarantee for the applicable tax, interest, and penalty. The petitioner, challenging a detention order and notice, claimed to have paid the required tax, while authorities argued otherwise. The court emphasized the need for a Bank Guarantee under Rule 140 to secure release, with the petitioner agreeing to comply. The judgment allowed the petitioner to challenge any future orders if dissatisfied, resolving the matter with the condition of furnishing the Bank Guarantee for prompt release within ten days.

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Issues involved: Challenge to detention order and consequential notice, payment of tax for goods, seizure of goods, submission of Bank Guarantee for release of goods and vehicle.

The judgment by the Allahabad High Court pertains to a writ petition challenging a detention order and consequential notice issued by the opposite party. The petitioner claimed to have paid the required tax for the goods being transported, stating that more tax than required had been deposited. The petitioner argued that the authorities had seized the goods and vehicle without proper application of mind, mentioning that an e-way bill was not needed as the goods were valued below a certain amount. However, the Standing Counsel contended that the tax had not been paid for the Tobacco bags, only for the Pan Masala. The Standing Counsel further pointed out discrepancies in the quantity of goods mentioned in the seizure memo compared to the tax invoice, and highlighted that the assessment order was passed under Section 129. The Standing Counsel suggested that the petitioner could secure the release of goods and the vehicle by submitting a Bank Guarantee for the applicable tax, interest, and penalty. The petitioner agreed to provide the Bank Guarantee, following which the court directed the opposite parties to release the goods and vehicle upon submission of the Bank Guarantee. The court referred to Rule 140, which allows for the release of goods upon furnishing security in the form of a Bank Guarantee equivalent to the amount of applicable tax, interest, and penalty. The court disposed of the writ petition with the condition that the petitioner must furnish the Bank Guarantee as required, after which the concerned authority should release the goods and vehicle promptly, preferably within ten days. The judgment also granted the petitioner the right to challenge any subsequent order before the appropriate forum if aggrieved.

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