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2018 (7) TMI 1324 - HC - Income TaxOrder of furnishing a bank guarantee to get release the entire stock of sugar seized in search - Settlement commission orders - refund claim - Held that:- It is well settled that the Department is entitled to secure the tax liability by keeping the goods seized. The petitioner was directed to furnish a bank guarantee of ₹ 63,85,000/-, but instead of complying the aforesaid direction, the petitioner furnished bank guarantee of only ₹ 40,20,833/- and, therefore, the Department kept 1200 bags of sugar which was ultimately auctioned pursuant to the order dated 17th October, 2002 passed by this Court. Had the petitioner furnished the bank guarantee, as directed by the Department for an amount of ₹ 63,85,000/-, the Department would have released entire stock of sugar and the Department was not required to keep 1200 bags of sugar in the warehouse for which it had to pay ₹ 3,09,780 as warehouse charges. Therefore, it was not the Department which was at fault, rather it was the petitioner itself for which the Department cannot be penalized and, therefore, the claim of the petitioner for refund of ₹ 3,09,740/- towards warehouse charges paid to the Central Warehouse Corporation by the Department for keeping 1200 bags of sugar is rejected. Waiver of interest u/s 234A, 234B and 234C - In respect of second prayer for granting interest from the date of seizure to the date of its actual payment, it is clear that the tax liability was much more than the goods and cash which was seized, including FDRs. However, the Settlement Commission waived of the interest amount to the tune of ₹ 43,53,651/-. The petitioner kept the issue alive till the final order was passed by the Settlement Commission on 25th February, 2015. Therefore, the petitioner cannot claim interest on the amount of ₹ 6,24,260/- from the date when the goods were auctioned. We are of the view the petitioner is entitled for the interest at the rate of 12% per annum from the date of final order passed by the Settlement Commission i.e. 25th February, 2015. Thus, we direct the respondent-authority to release ₹ 6,24,260/- lying with the CIT (Moradabad) with interest at the rate of 12% per annum from 24th February, 2015 till the date actual payment is made. We further direct that the needful should be done within a period of four weeks from the date of production of certified copy of this order.
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