Premature deposit demand rejected where goods were released on undertaking and bond pending adjudication of liability and confiscation.

Where liability to duty or penalty and the liability of goods to confiscation have not yet been adjudicated, the department cannot insist on a fresh deposit of the same amount before final determination. The goods had already been released on a recorded undertaking and bond securing payment of any amount ultimately imposed, so the department's recovery interests were already protected. On that basis, a further demand for deposit pending adjudication was held to be premature and unsustainable, and the writ of prohibition was issued in favour of the petitioner.

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Issues: Whether the departmental authorities could demand payment of the bond amount and compel return of the goods before any adjudication on liability, penalty, or confiscation had been made.

Analysis: The petitioner's liability to duty or penalty, and the liability of the goods to confiscation, had not yet been determined. The goods had been released on a recorded undertaking that covered payment of any additional amount ultimately imposed, and the bond was intended only to secure the department's interest if confiscation or penalty was later ordered. In these circumstances, the department had no justification to insist on a further deposit of the same amount pending final adjudication, since the existing undertaking and bond preserved whatever recovery rights the department might have in due course.

Conclusion: The demand for deposit was premature and unsustainable, and the writ of prohibition was rightly issued in favour of the petitioner.

Final Conclusion: Pending adjudication, the department could not insist on an additional monetary deposit when the goods had already been released on an enforceable undertaking and bond.

Ratio Decidendi: Where liability and confiscation are yet to be adjudicated, a department cannot require a further deposit of the same amount if the goods were already released on a valid undertaking or bond securing any ultimate demand.

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