Court orders Revenue to pay interest on wrongfully confiscated funds, citing obligation to refund with interest.

The court held in favor of the appellant, ruling that the Revenue must pay interest on the wrongfully confiscated amount that was later refunded. The court emphasized the principle that the government cannot benefit from unlawfully held funds and cited case law supporting the obligation to refund such amounts with interest. Relying on a Supreme Court decision, the court concluded that the appellant is entitled to interest for the entire period the funds were in the Revenue's possession. As a result, the department was ordered to pay accrued interest on the refunded amount, and the appeal was allowed in favor of the appellant.

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Issues:
- Whether the tribunal was justified in rejecting the claim of interest on the refunded amountRs.

Analysis:
The judgment primarily revolves around the tribunal's decision to reject the claim of interest on the amount refunded to the appellant. The appellant had Indian currency seized in 2004, which was later confiscated. Upon challenging the confiscation order, the tribunal ruled in favor of the appellant, leading to the refund of the seized currency without interest. However, it was revealed that the Revenue had deposited the currency in a fixed deposit and earned interest on it, which was not refunded to the appellant. The court emphasized the principle that the government cannot enrich itself at the expense of others and cited the case law to support the obligation to refund any amount retained by the Revenue with interest when found to be refundable. The court referred to the case of Union of India through Director of Income Tax Vs. TATA Chemicals Limited, where it was established that the Revenue must refund illegally collected amounts with interest since they retained and benefited from the money deposited. The court held that the absence of an express statutory provision for interest payment does not absolve the Revenue from the obligation to refund money received and retained without right, which inherently includes the payment of interest.

The court, relying on the Supreme Court's decision, concluded that the appellant is entitled to interest on the illegally confiscated amount that was eventually refunded. Consequently, the department was mandated to pay interest on the confiscated amount for the entire period it remained in the Revenue's custody. The judgment was delivered in favor of the appellant, directing the Revenue to pay the accrued interest on the confiscated amount. The appeal was allowed based on the court's determination that the appellant is entitled to interest on the wrongfully confiscated and subsequently refunded amount.

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