Allahabad HC directs I-T department to pay Rs 94.65 lakh to petitioner after seized jewellery ‘lost’ in bank’s custody

The bench observed that the recovery and return process had been inexplicably delayed. “It is clear from the facts that the Income Tax authorities are delaying the entire process,” the court said in its order, adding that the money should have been returned in 2023 when the petitioner had agreed to a settled amount of Rs 41,52,146.

The court said that the petitioner’s concern is receipt of compensation, not the technical question of which agency, the bank or the tax department, ultimately pays.

While disposing of the petition, the court directed the Income Tax authorities to examine the valuation submitted by the petitioner on July 30, 2025 (pages 72–75 of the writ petition) and, after verification, pay the assessed amount within four weeks from the date of the order.

The court warned that if payment was not made within that timeframe, the Income Tax authorities would be liable to pay penal interest at 12 per cent on the jewellery’s valuation beginning from the date of seizure.

The judgment also clarified that the Income Tax authorities would be at liberty to pursue recovery from the respondent bank in accordance with law. The court’s direction effectively places immediate liability on the tax department to ensure the petitioner is made whole, while preserving the department’s right to seek redress from the bank that lost the seized property. The exact date by which the payment must be completed runs from the day the order was issued.