Bank guarantee for detained goods cannot be continued where consistent GST compliance sufficiently secures the revenue's interest.

Bank guarantee furnished only to secure release of detained goods and conveyance could not be insisted upon once the taxpayers had obtained release, succeeded before the first appellate authority, and shown a consistent GST compliance record. The record of regular registration, timely return filing, and substantial tax payments over several years was treated as sufficient to protect the revenue's interest in the peculiar facts of the case. The endorsements requiring continued security were therefore unsustainable and were set aside, and the bank guarantees were directed to be returned.

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Issues: Whether the endorsements insisting on continuance of the bank guarantee could be sustained after the petitioners had obtained release of the goods and conveyance, had succeeded before the first appellate authority, and had shown a consistent track record of GST compliance.

Analysis: The bank guarantee had been furnished only to secure the value of the goods and conveyance pending adjudication. Although the revenue's concern to protect its interest until finality of the proceedings was acknowledged, the petitioners placed material showing regular registration, timely filing of returns, and substantial tax payments over several years. On the facts presented, the record indicated bona fides and a genuine compliance history, so the petitioners' past conduct itself sufficiently secured the revenue's interest in the peculiar circumstances of the case.

Conclusion: The endorsements were unsustainable and were set aside. The bank guarantees were directed to be returned, and the petition was disposed of in favour of the petitioners.

Ratio Decidendi: Where a bank guarantee was furnished only as security for release of detained goods and the taxpayer's consistent compliance record prima facie secured the revenue's interest, continuance of the guarantee could not be insisted upon in the peculiar facts of the case.

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