| The Tax Publishers2020 TaxPub(DT) 0917 (SC) INCOME TAX ACT, 1961
Section 132
When liability to pay the amount seized and retained from assessee, was acknowledged and accepted, then to deny relief by directing payment in terms of order under section 132(5) was unjust, unfair and inequitable. Thus, appeal was allowed with direction to revenue authorities to pay the amount with interest.
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Search and seizure - Validity of directing Assessee to make payment in terms of order under section 132(5) - Denial of Refund for amount seized and retained, which was accepted by revenue -
Assessee checked into a hotel and pursuant to a search and seizure operations under section 132, cash of Rs. 5,00,000 was seized from him. An order under section 132(5) was passed holding that source of said cash was doubtful and therefore, amount seized would be retained until assessment for relevant assessment year (1988-1989) was finalized. Aforesaid order was challenged before High Court filing a writ petition. Court set aside said order as it was passed without following principles of natural justice. However, assessee could not get refund of said amount and again filed writ petition, which was denied holding that petition was filed more than a decade later and therefore did not deserve any relief under Court's discretionary and equitable jurisdiction. Held: In facts of present case, revenue did not and could not dispute that they have to refund seized amount. Further, considerable delay and failure to make payment constitutes and is inseparable from cause of action as delay and negligence was on the part of revenue authorities. Assessee did not seek setting-aside or quashing of an adverse order, no third-party rights were involved and revenue ex-facie would not suffer due to a change of position. Prayer for compliance of a valid and legal order passed cannot be equated with prayers made in repeated representations seeking a change of position. When, liability to pay Rs. 4,99,900 was acknowledged and accepted, then to deny relief by directing payment in terms of the order under section 132(5) would be unjust, unfair and inequitable. Statute mandates revenue to make payment. For the aforesaid reasons, appeal was allowed with direction to revenue authorities to pay Rs. 4,99,900 with interest as per law within a period of three months.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE SUPREME COURT OF INDIA
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