Interest awarded to the assessee by the High Court for illeg

Last updated: 28 November 2007

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Court :
SC

Brief :
. On a writ petition filed by the assessee challenging the seizure of certain jewellery and ornaments belonging to the assessee, the High Court held that the search and seizure were invalid and illegal. The High Court ordered that interest at the rate of 8% per annum should be paid on the value of diamonds and jewellery worth Rs. 84.68 lakhs from the date of seizure till payment. 2. Allowing the departmental appeal the Supreme Court held as under : "Without going into the question as to the payability of interest on the value of goods found by the court to have been illegally seized, we hold that the appellants are liable to compensate the respondents at least by way of costs. The loss obviously suffered by the respondents during the pendency of the proceedings before the High Court was further aggravated by the delay in complying with the High Court’s decision. In the circumstances, we direct the appellants to pay a sum of Rs. 75,000/- to the respondents on account of costs which the respondents will accept in full and final settlement of the claim towards the quantum of interest under the impugned order. Such payment is to be made within a period of four weeks. In the event such payment is not made, this appeal will stand dismissed with costs." Reepal Tralshawala Chartered Accountant Rupesh Srivastava e.mail: rupesh@thetaxcorp.com PH: 9225908041 (Goa) 9243408041 ( Karnataka

Citation :
Director-General of Income-tax & Anr. vs. Diamondstar Exports Ltd. & Ors. [293 ITR 438 (SC)]