Fear of arrest costs an assessee Rs 16 Crores – reduced to 8 Crores by Supreme Court.
An assessee is charged with availing an exemption notification wrongly. The assessee is afraid that he would be arrested and categorically states that the Armed Guards are waiting at his residence to take him into custody. He is in writ petition before the High Court. The High Court orders deposit of Rs. 16 Crores and furnishing of bank guarantee of an equal amount.
All this, without even a Show cause Notice! Please see - 16.05.2008 for more details of this case.
Now the matter is before Supreme Court. The Apex Court has directed deposit of Rupees Eight Crores!
For fear of arrest, the assessee is ending up paying Rs. 8 Crores!
The moral of the story is: - IT IS NOT ALWAYS SAFE TO RUN TO High Courts even before a Show cause Notice is issued.
When Central Excise officers arrest somebody, they don't keep armed guards at his residence; they simply go ahead and arrest him.
Panic reaction will ultimately make you poorer by a few Crores.
For the Supreme Court order Click here .