2007 (10) TMI 291

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....emises of the partnership firm and one of its partners, namely, Shri Puran Mal. The search and seizure operation was conducted in Delhi, Hathras and Bombay. As a result of the operation, 114 silver bars lying deposited with the Laxmi Commercial Bank in Delhi and Punjab National Bank in Delhi were seized by the Respondents along with books of accounts and other documents. 3. It was submitted by learned counsel for the Petitioners that the silver bars belonged to Puran Mal (individual) and not to the partnership firm. We need not go into this controversy since Puran Mal (Individual) is not before us. 4. Be that as it may, assessment proceedings were held and by an assessment order dated 20th January, 1978 the income of the partnership firm ....

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....cash and, therefore, the provisions of Section 132B of the Act would not be applicable. 8. It is under these circumstances that the Petitioners have filed the present writ petition wherein they have prayed for payment of interest to the extent of Rs.16.3 crores or in any case a sum of Rs. 7.43 crores as interest under Section 132B(4) of the Act on the seized assets. 9. We are inclined to dismiss the writ petition for several reasons. 10. In the first place, the tax liability of the partnership firm was assessed at Rs. 2,067/- as far back as on 31st May, 1979 making it quite clear to the partnership firm that it had become entitled to release of the silver bars. In spite of this, the partnership firm took no steps to demand any interest o....

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....he Act on seizure of assets. The relevant provision of law is Section 132B (4) and this reads as follows:- "(4)(a) The Central Government shall pay simple interest at the rate of six per cent per annum on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132A, as reduced by the amount of money, if any, released under the first proviso to clause (i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub-section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immedi....

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....s drew our attention to Dimondstar Exports Ltd. v. Director General of Income Tax (Invvestigation), [2005] 278 ITR 36 (Bom) ; [2005] 194 CTR 132 (Bom). In this case, Respondents were directed to return the gold, diamond, jewellery and ornaments seized from petitioner No. 3 therein with interest @ 8% per annum on the value of the jewellery and ornaments. The cited decision is clearly distinguishable for the reason that the question before the Bombay High Court was the legality of the warrant of authorisation issued under Section 132 of the Act. The High Court held that the warrant of authorisation itself was liable to be struck down and it is in this context that the final order was passed. In so far as the case that we are dealing with is c....