The Court proceedings have been conducted through video-conference.

2. Heard Ms. N. Hawelia, learned counsel for the applicants. Also heard Mr. S.C. Keyal, learned Standing Counsel, GST.

3. The present application has been filed to release the seized goods in terms of the order dated 15.03.2021 passed by this Court in WP(C) No.1003/2021.

4. According to the learned counsel for the applicants, the authorities are putting unnecessary conditions for release of the seized goods though the applicants are willing to pay the tax on the value of the goods. However, the authorities are unreasonably insisting on payment of penalty also though the matter is yet to be settled finally. In fact, according to the applicants, the goods are properly obtained through legitimate means and not liable to any penalty and, as such, if these conditions are imposed, it will amount to putting unreasonable conditions.

5. As regards this, Mr. Keyal, learned Standing Counsel, GST, submits that the imposition of the requirement of payment of penalty by way of bond with security is in view of the specific provisions of Section 67(6) of the Central Goods and Service Tax Act, 2017 (GST Act), which provides, inter alia, that the goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be and it has been held by the Hon’ble Supreme Court in State of Uttar Pradesh and others Vs. Kay Pan Fragrance, reported in (2020) 5 SCC 811, that the provisions of the statute must also be complied with when release of seized goods is ordered and, as such, the conditions imposed by the authorities as contained in the communication dated 17.03.2021, which has been challenged in this Interlocutory Application, is without any basis.

6. This Court having heard learned counsel for the parties and also on perusal of the materials on record, is of the view that it is the mandate of law that at the time of release, not only the value of the goods but also the penalty as may be payable as per the authorities are liable to be paid for which the owner of the goods may have to execute a bond with security thereof and, as such, in the present case, directing the applicants to execute bond and furnishing Bank Guarantee of the amount mentioned in the said communication cannot be said to be beyond the purview of law. In fact, it is within the provisions of law referred to above.

7. In that view of the matter, the present application is allowed. The applicants shall execute a bond and furnish Bank Guarantee in respect of the following amount mentioned in the communication dated 17.03.2021:-

“Tax payable([email protected]%[email protected]%) – 5% of ₹ 67,35,300.00 = ₹ 3,36,750.00.

Penalty payable as per Section 122(1) (xvii) (xviii) @5% (2.5%+2.5%) = ₹ 3,36,750.00.”

8. Upon execution of bond and furnishing of Bank Guarantee of the aforesaid amounts of tax and proposed penalty, the goods shall immediately be released. It is also made clear that any execution of bond and furnishing of Bank Guarantee and release of the seized goods shall be subject to final outcome of the writ petition.

9. The IA is, accordingly, disposed of.