Wp/19326/2011 Of Mr.anil Agarwal v. Director Of Income Tax (Investigations)

THE HON'BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.19326 of 2011 Dated:20.07.2011 Between: Mr.Anil Agarwal. And … Petitio Director of Income Tax (Investigations),9[th] Floor, Aayakar Bhavan, Basheerbagh, Hyderabad,and others. ... Responde THE HON'BLE SRI JUSTICE V.V.S.RAOAND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.19326 of 2011 ORDER:(Per Hon’ble Sri Justice Ramesh Ranganathan) The action of respondent Nos.1 to 3 in seizing the stock, allegbelonging to the petitioner, on 28.06.2011 is under challenge in this writ petas being arbitrary and illegal. A consequential direction is sought to the respondent to release the stock seized, and to handover custody of the samthe petitioner. The petitioner claims to be engaged in the business of sale of jewelleris his case that they maintain regular stock of jewellery in their premises; epiece of jewellery has a tag which indicates the gross weight of the ornamnet weight of the carat value of the stones etc.; they also keep photographeach and every piece of jewellery/ornaments which is in their stock; to seljewellery in the market they send these items with trusted employees to odealers of ornaments in the city; respondent Nos.6 and 7 are two semployees who have been regularly carrying petitioner’s ornaments to odealers in the twin cities for the purpose of sale; on 27.06.2011 the petitioner sent 41 sets of ornaments along with respondent Nos.6 and 7; the total weigthe gold ornaments was 2548.710 grams, the total caratage of the diamonds 416.09 carats, and the weight of coloured stones, rubies etc., was 203carats; the petitioner had handed over a certificate to respondent Nos.6 and 25.06.2011; and the fifth respondent had intercepted respondent Nos.6 an and had addressed a letter to the fourth respondent resulting in the respondent seizing the stock from respondent Nos.6 and 7 on 28.06.2011. According to the petitioner, he received summons from the respondent informing that a survey would be conducted under Section 133the Income Tax Act, 1961 (the Act); pursuant thereto the entire jewellery inpetitioner’s stock had been inventorised, and a complete report of the valuaof jewellery had been prepared; and a copy of the said valuation report wasin the premises of the petitioner. It is petitioner’s case that, despite submitting a representationrespondent Nos.1 to 3, no action was taken though respondent Nos.6 and 7 specifically stated that the jewellery seized from them belonged to the petitioand they were his employees. A counter affidavit is filed by the respondents to which a reply affidavalso filed by the petitioner. Sri S.Ravi, learned Counsel for the petitioner, submits that it is only incourse of search under Section 132 of the Act were the respondents entitleseize the goods; even in such cases Section 133A(4) of the Act prohibitedstock of jewellery being seized; and, in as much as jewellery seized respondent Nos.6 and 7 constituted the petitioner’s stock in trade, both search carried on respondent Nos.6 and 7, and the seizure of 41 item jewellery from them, was contrary to the provisions of the Act and hence ille Learned Counsel would also submit that the respondents had not even furnis copies of the statements recorded from him, and respondent Nos.6 an despite repeated requested by him that the copies thereof be furnished. Sri S.R.Ashok, learned Senior Counsel appearing on behalf of IncTax Department, would rebut the said contentions and submit that it is whunnecessary that the search should be carried out only in the premises ofpetitioner; the search carried out on respondent Nos.6 and 7 at Aaykar Bha also fell within the ambit of Section 132 of the Act; and, in the absencacceptable evidence that the 41 items of jewellery belonged to the petitioand not to respondent Nos.6 and 7, the third respondent was justified in seithe said items of jewellery. Learned Senior Counsel would submit that Learned Counsel would also submit that the respondents had not even furnis copies of the statements recorded from him, and respondent Nos.6 an despite repeated requested by him that the copies thereof be furnished. Sri S.R.Ashok, learned Senior Counsel appearing on behalf of IncTax Department, would rebut the said contentions and submit that it is whunnecessary that the search should be carried out only in the premises ofpetitioner; the search carried out on respondent Nos.6 and 7 at Aaykar Bha also fell within the ambit of Section 132 of the Act; and, in the absencacceptable evidence that the 41 items of jewellery belonged to the petitioand not to respondent Nos.6 and 7, the third respondent was justified in seithe said items of jewellery. Learned Senior Counsel would submit that petitioner has an effective alternative remedy by way of application to assessing authority under Section 132B of the Act without availing which petitioner had needlessly invoked the jurisdiction of this Court under Article of the Constitution. The proviso to Section 132B(1) of the Act enables the person conceto make an application to the assessing authority, within thirty days from the of the month in which the asset was seized, seeking release of the asset anexplain the nature and source of the acquisition of such asset and, ifassessing authority is satisfied, it is open to him to either release the asse their entirety or such part thereof as would remain after securing the asset to extent of the existing liability. Since the petitioner has an effective alternative statutory remedy unthe proviso to Section 132B(1) of the Act, we relegate him to such a reme Needless to state that it is open to the petitioner to raise all such contentionshave been raised in this writ petition, before the assessing authority who shwithin two months from the date of receipt of the representation, pass ordthereupon in accordance with law. It is also open to the petitioner to makrepresentation requesting that the statements recorded from him, and frespondent Nos.6 and 7, be furnished. We have no reason to doubt thatsuch a representation being made, the assessing authority shall pass ordthereupon, in accordance with law, expeditiously. The writ petition is accordingly disposed of. However, in circumstances, without costs. _____________ (V.V.S. RAO 20.07.2011 vs ____________________________ (RAMESH RANGANATHAN