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TMI Blog2018 (7) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Department (hereinafter referred to as 'Department') to compensate the petitioner for the loss occurred due to alleged negligence on the part of the Department. 2. The petitioner is a firm which has been doing business of manufacture of Khandsari sugar and rab etc. A raid was conducted on the business and residential premises of the partners on 4th April, 1995 by the Department. A search and seizure operation was carried out under Section 132 of the Income Tax Act (hereinafter referred to as 'Act'). The authorities seized FDRs worth Rs. 14 Lakhs and cash amount of Rs. 10,65,000/- along with sugar stock. 3. On 5th July, 1995, the petitioner wrote to the Assistant Commissioner of the Income Tax Investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Civil Misc. Writ Petition No.900 of 1995 and held that the tax liability assessed against the petitioner was found to the tune of Rs. 1,64,84,223/- which was much more than the value of the goods so seized and, therefore, this Court did not find any illegality in the order, requiring the petitioner to furnish a bank guarantee of Rs. 63,85,000/- in favour of the Department to get release of stock of the sugar. However, it was said that this order would be subject to the final order passed under Section Section 132 (12) of the Act. 6. Despite dismissal of aforesaid writ petition by holding that there was no illegality in requiring the petitioner to furnish a bank guarantee of Rs. 63,85,000/-, the petitioner furnished bank guarantee only fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement Commission passed the final order on 27th March, 2012. The Settlement Commission had upheld the interest under Section 234A and 234C of the Act. However, it waived of interest under Section 234B amounting to Rs. 43,53,651/-. After the tax liabilities were finalized by the Settlement Commission, notice of demand dated 23rd November, 2012 was issued. The petitioner challenged the aforesaid notice of demand by filing Writ Petition No. 303 of 2013 before this Court on various grounds namely (i) the notice of demand was issued after a delay of 7 months from the date of passing of order under Section 245D(4), (ii) the notice of demand did not specify the period for which the interest u/s 234A, 234B and 234C was charged and (iii) rectific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 234A and 234C as per the record." The Settlement Commission specifically rejected the claim of the petitioner with reference to the loss occurred due to seizure of sugar as it held that it was not under the powers and functions of the Income Tax Settlement Commission to pass any such order. 9. We have heard Mr. Kaushalendra Nath Singh, learned counsel appearing for the petitioner, and Mr. Shubham Agarwal, learned counsel appearing for respondents. 10. 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 Rs. 63,85,000/-, but instead of complying the aforesaid direction, the petitioner furnished bank guarantee of only Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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