Authority cannot urge or insist assessee to deposit bank guarantee for release of goods if bond is already executed as per provisions.

Case Details:

Issue- In the above case, the petitioner has requested for the provisional release since the tax and penalty had already been paid and bond was furnished, however, that was not done and hence, his goods and vehicle continued to be detained. According to the petitioner, this is wholly arbitrary and illegal action. The representation had also been made contending that while it was ready to make payment of tax and penalty, for the remaining amount the statutory provision only required furnishing of bond.

Held- It was held that there is a difference between Bond & Bank Guarantee. It being a vital distinction between the bond and the Bank Guarantee, once the writ applicant executes a bond to the satisfaction of the authority, the authority concerned cannot insist for the Bank Guarantee. It is quite clear that second option of furnishing the security for tax, interest and penalty, there will be no requirement for giving the bond in a case where the person has already made payment of tax, penalty and interest. The petitioner has already made payment of tax and penalty as well as furnished the bond and since the petitioner is unable to insist on the Bank Guarantee, when the requirement is of execution of the bond, to insist on the furnishing the security is something undesirable and the communication dated 30-9-2021 received by the respondents, permitting provisional release on payment of tax, penalty and furnishing the Bank Guarantee for the value of goods. The representation of the petitioner was to the effect that it was ready to make payment of tax and penalty so far as the remaining amount is concerned, the statutory provision required the furnishing of the bond. The revised letter on 12-11-2021 ordered provisional release of the goods and conveyance upon payment of tax and penalty and furnishing of the bond. The collateral security would not be necessary. Resultantly, present petition is allowed. The respondent is directed to release the goods and conveyance since the bond has already been furnished as required.