Pre-adjudication recovery barred while provisional release of detained goods and vehicle may be granted on security conditions.

Full pre-adjudication recovery of disputed tax and penalty was impermissible where the liability remained under inquiry, but the authority could continue the show-cause proceedings in accordance with law. The detained consignment, vehicle and goods were ordered to be released provisionally on conditions securing the alleged revenue: deposit of 50% of the disputed amount under the State GST Act and a bond for the balance 50%. The ruling preserves the department's power to complete adjudication while preventing coercive recovery before determination of liability.

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Issues: Whether the tax department could insist on full payment of disputed tax and penalty before adjudication, and whether the vehicle and goods could be released pending the proceedings.

Analysis: The petitioner's consignment was detained on the allegation of misdeclaration in the e-way bill. The competent authority was permitted to continue the inquiry and adjudicate the show-cause notice in accordance with law. However, the insistence on immediate recovery of the entire disputed tax and penalty before any adjudication was held to be impermissible. The Court directed release of the vehicle and goods on a conditional basis by requiring deposit of 50% of the disputed amount under Section 49 of the State GST Act and a bond for the remaining 50% to secure any eventual liability.

Conclusion: The demand for full pre-adjudication recovery was not sustained, and provisional release of the goods and vehicle was allowed on the specified conditions.

Final Conclusion: The petition succeeded to the extent of preventing coercive recovery before adjudication while preserving the authority's power to complete the tax and penalty proceedings.

Ratio Decidendi: Disputed tax and penalty cannot be recovered before adjudication is completed, though provisional release may be ordered on conditions securing the alleged revenue.

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