Kuhshpat Shah v. The Director General Of Income Tax (Investigation) And Another

1 of 5 WP.292.2013 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.292 OF 2013 Kuhshpat ShahPetitioner versusThe Director General of Income Tax(Investigation) and anotherRespondents Mr.Pradeep S. Jetly with Mr.Kookada and Mr.Ashok R. Verma i/by Kookada & Associates for Petitioner.Mr.P.C.Chhotarey for Respondents. CORAM : DR.D.Y.CHANDRACHUD AND A.A.SAYED, JJ. PC : DATE : 13 March 2013 1.In these proceedings under Article 226 of the Constitution of India, the Petitioner seeks the issuance of an appropriate writ challenging the seizure action and the release of two gold bars each of 1 kg; twenty pieces of gold each of 100 gms. aggregating to 4 kgs. and cash in the amount of Rs.1.50 crores. 2.An affidavit-in-reply has been filed by the Deputy Director of Income Tax (Investigation). 3.A search action was initiated on a group of individuals/ concerns who are alleged to be involved in Hawala transactions involving an illegal transfer of cash. An entity by the name of 2 of 5 WP.292.2013 M/s.Gold Sukh Safety Vault Limited was providing lockers. It was alleged that the locker was assigned in the name of the first holder whose KYC details were kept on record, but in actuality a locker could be used by several other persons whose names were incorporated in the agreement. A number of lockers were alleged to have been given on rent to Hawala operators. The modus operandi followed was that the beneficiary intending to transfer money from one place to the other would visit the office of the Hawala operator at the place from where the money was sought to be transferred and where money was deposited against the receipt of a code number. A message was received by the transferee in the place to which the money was to be transferred who would receive the money against the confirmation of the code number. The transferee, it has been alleged, was taken by the Hawala operator to the locker and the transfer of the cash would take place there. A total of 44 lockers were searched at Gold Sukh Safety Vaults Limited including a locker held by a person by the name of Rashesh A. Shah. A search action took place on 9 November 2012 upon the issuance of a warrant of authorization which was issued in the name of Rashesh A. Shah in respect of Locker No.410418. A prohibitory order was issued under section 132(3) of the Income Tax Act, 1961 on 9 November 2012. 4.On 16 November 2012, the Petitioner who is one of the co-holders of the locker appeared before the DDIT. His statement was recorded under section 131 in which he is alleged to have stated that he was the last operator of the locker which stood in the name of Rashesh Shah. The Petitioner, however, claims that the contents of 3 of 5 WP.292.2013 the locker were his, that he did not maintain books of account or a cash book or a register. Moreover, it was stated that the contents of the locker are unaccounted, the source of which could not be explained. The Petitioner is alleged to have then stated that he would return with the keys of the locker. However, he disappeared from the scene thereafter. 4.On 16 November 2012, the Petitioner who is one of the co-holders of the locker appeared before the DDIT. His statement was recorded under section 131 in which he is alleged to have stated that he was the last operator of the locker which stood in the name of Rashesh Shah. The Petitioner, however, claims that the contents of 3 of 5 WP.292.2013 the locker were his, that he did not maintain books of account or a cash book or a register. Moreover, it was stated that the contents of the locker are unaccounted, the source of which could not be explained. The Petitioner is alleged to have then stated that he would return with the keys of the locker. However, he disappeared from the scene thereafter. 5.On 17 November 2012, a communication was addressed to the holder of the locker requiring him to appear for the completion of the search proceedings. An opportunity was also given to the Petitioner by a letter dated 19 November 2012 to present himself on 20 November 2012. The letter was served on the Petitioner. A statement was recorded of the Director of Gold Sukh Safety Vaults Limited on 21 November 2012 who stated that the locker was operated by the Petitioner and who is shown in the records as the last person who had operated the locker. Since neither the holder of the locker nor the Petitioner presented themselves in pursuance of the notice issued to them, the locker was broken open on 21 November 2012. During the course of the search, cash of Rs.1.50 crores was seized together with the gold bars noted earlier of a value of Rs.1.28 crores. The Petitioner addressed a communication to the Additional DIT (Investigation), Unit-V, Mumbai on 21 November 2012. On 22 November 2012, another communication was received containing, inter alia, an affidavit and certain other documents containing a copy of an alleged purchase register, sales register, stock registrar, cash book and purchase bills/invoices. These communications, according to the Revenue, were received after the search and seizure operations had been completed. 4 of 5 WP.292.2013 6.A summons was issued to the Petitioner on 11 December 2012 upon which the Petitioner sought an adjournment of three to four days. On 17 December 2012, the Petitioner sought release of the seized material and sought a final adjournment until 21 December 2012. On 21 December 2012, the Petitioner once again failed to remain present. On 10 January 2013 a summons was issued to the holder of the locker as well as to the Petitioner for his personal attendance. Neither the holder of the locker nor the Petitioner have availed of the opportunity that was issued to them. 7.The Revenue has stated on affidavit that the documents which have been seized during the search action on certain other premises indicated that the source of cash found from locker no.418 is prima facie part of large international hawala transactions. The Assessing Officer in the case of the holder of the locker has been intimated about the search and the seized documents have been handed over for further action under Section 153-A, or as the case may be, 153-C. In the affidavit-in-reply it has also been stated that the sales register submitted by the Petitioner shows unusual trends insofar as cash sales are concerned and unusually high cash sales have been shown after 25 October 2012. The sales bills for the cash sales do not mention the names of the persons to whom the bullion was sold and in place of the purchase party, the word `cash' is written. No bank details have been furnished by the Petitioner. 8.At the hearing of the petition, the only relief which has been pressed at this stage is that a direction may be issued to the Deputy 5 of 5 WP.292.2013 8.At the hearing of the petition, the only relief which has been pressed at this stage is that a direction may be issued to the Deputy 5 of 5 WP.292.2013 Director of Income Tax (Investigation) to dispose of the representation submitted by the Petitioner on 17 December 2012. Innocuous as the prayer may seem, we are not inclined to accede to the request at this stage. It is evident that sufficient opportunities have been granted to the Petitioner to appear before the DDIT. The Petitioner has failed to appear in response to the summons. The proceedings in the present case were adopted against the holder of the locker and the search proceedings have been completed. An assessment would now be carried out in accordance with law by the Assessing Officer by following the provisions of Section 153A or, as the case may be, Section 153C. The Petitioner has consistently chosen to evade the process of law. During the course of assessment proceedings, the Assessing Officer would have regard to all the relevant facts and circumstances. 9.In these circumstances, we are not inclined to entertain the petition at this stage. The petition shall accordingly stand dismissed. There shall be no order as to costs. (DR.D.Y.CHANDRACHUD, J.) (A.A.SAYED, J.)