2008 (7) TMI 157 - HC - Central Excise

Petitioner has submitted that there is no amount outstanding against them but under duress and threat they were forced to deposit the draft of Rs. 1 crore and three other post dated cheques of Rs. 75 lacs during search and seizure since investigation is continue and no amount due has been determined by authority against petitioner revenue is directed to return the impugned amount admittedly deposited by the petitioner along with copies of Panchnama

Summary

Issues:
Petition for mandamus to return/refund money and cheques, Dispute over the amount outstanding, Legality of retaining the deposited sum, Safeguarding revenue's interest with property as security, Timely finalization of investigation.

Analysis:
The petitioner filed a writ petition seeking a mandamus to direct the respondent to return a sum of Rs. 1 crore and post-dated cheques of Rs. 75 lacs, along with other requests related to the search and seizure process. The petitioner's counsel argued that there was no outstanding amount, and the money was deposited under duress, while the respondent's counsel claimed the deposit was voluntary. The investigation was ongoing, and the liability could exceed the deposited amount. However, currently, there was no outstanding sum against the petitioner.

The court noted that since no amount was due from the petitioner as of the present date and the investigation was ongoing without any determined payable amount, there was no justification for the department to retain the deposited sum and cheques. The court emphasized that the department had no legal or moral right to hold the money without a raised demand but could recover it when a demand was established. The court directed the respondent to refund the Rs. 1 crore and return the cheques within a month, ensuring the revenue's interest was safeguarded by keeping two industrial plots owned by the petitioner as security.

An affidavit was submitted confirming the ownership of the industrial plots by the petitioner, free from encumbrances, to secure the revenue's interest. The court ordered the respondent to refund the money, return the cheques, provide copies of relevant documents, and finalize the investigation within a year. The order was made without prejudice to the rights of either party, ensuring a fair and timely resolution while safeguarding the revenue's interest with the property as security.