Delhi High Court Orders Release of Seized Jewellery, Cash After Family Agrees to Pay ₹25 Crore Advance Tax
Court Balances Revenue Interests with Petitioners’ Rights in Income Tax Search Case
Conditional Release Ensures Safeguards Without Prejudging Alleged Undisclosed Income
By Our Legal Reporter
New Delhi: January 24, 2026:
In a significant ruling that balances taxpayer rights with the government’s revenue interests, the Delhi High Court has directed the Income Tax Department to release jewellery, bullion, cash, and foreign currency seized from the Rastogi family during a search operation. The release was ordered after the family agreed to deposit ₹25 crore as advance/self-assessment tax, ensuring that the Revenue’s interests are protected while proceedings continue.
The judgment, delivered by a division bench comprising Justice Dinesh Mehta and Justice Meetu Kumari, underscores the principle that courts must safeguard both the taxpayer’s property rights and the government’s legitimate claims.
Background of the Case
- The Search: Between December 17–20, 2024, the Income Tax Department conducted searches at the Rastogi family’s premises, seizing gold jewellery, bullion, cash, and foreign exchange worth over ₹6.35 crore.
- The Petition: The family filed writ petitions before the Delhi High Court, challenging the continued retention of seized assets. They argued that the assets were explained or explainable and that proceedings under Section 158BC of the Income Tax Act had not yet concluded.
- Revenue’s Stand: The Income Tax Department opposed the release, citing concerns about safeguarding potential tax liabilities.
- Court’s Decision: The High Court ordered conditional release, requiring the family to deposit ₹25 crore as advance/self-assessment tax.
Court’s Observations
The Delhi High Court made several important points:
- Safeguarding Revenue: The deposit of ₹25 crore ensures that the government’s interests are protected pending final assessment.
- No Ruling on Merits: The court refrained from ruling on whether the seized assets represented undisclosed income, leaving that to the ongoing proceedings.
- Conditional Release: The release of assets was conditional, subject to compliance with the advance tax deposit.
- Balance of Interests: The ruling reflects judicial balance—protecting taxpayer rights while ensuring revenue security.
Why This Ruling Matters
- For Taxpayers: The judgment shows that courts can intervene to protect property rights during prolonged investigations.
- For Revenue Authorities: It reinforces the principle that safeguarding revenue interests is paramount but must be balanced with fairness.
- For Legal Clarity: The ruling clarifies that conditional release of seized assets is possible without prejudging tax liability.
- For Judicial Oversight: It highlights the role of High Courts in supervising tax investigations to prevent undue hardship.
Wider Implications
- Taxpayer Relief: Families facing prolonged retention of assets may seek similar relief by offering advance tax deposits.
- Revenue Safeguards: The ruling ensures that the government’s claims are not jeopardized while protecting taxpayer rights.
- Judicial Precedent: The case sets a precedent for balancing competing interests in tax search cases.
- Public Confidence: The judgment strengthens confidence in judicial oversight of tax administration.
Conclusion
The Delhi High Court’s decision to release seized jewellery, bullion, cash, and forex after the Rastogi family agreed to deposit ₹25 crore as advance tax is a landmark in balancing taxpayer rights with revenue interests. By ordering conditional release, the court ensured fairness without undermining the Income Tax Department’s authority.
This ruling will likely serve as a precedent in future tax search cases, reinforcing the principle that courts can provide relief while safeguarding the government’s legitimate claims.
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