Wp(C)/11404/2010 Of Sheel Kudiyirippil v. The Assistant Director Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 6TH JANUARY 2011 / 16TH POUSHA 1932 WP(C).No. 11404 of 2010(A) -------------------------- PETITIONER : -------------------- SHEEL KUDIYIRIPPIL, KUDIYIRIPPIL HOUSE, MATTOOR, KALADY, KERALA. BY ADVS. SRI.KMV.PANDALAI SMT.S.HEMALATHA RESPONDENT(S): ------------------------- 1. THE ASSISTANT DIRECTOR OF INCOME TAX, (INVESTIGATION)-II, ERNAKULAM. 2. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, ERNAKULAM. R1 TO R3 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/12/2010, THE COURT ON 06/01/2011 DELIVERED THE FOLLOWING: T.R. RAMACHANDRAN NAIR, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C). No.11404/2010-A ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 6[th] day of January, 2011 J U D G M E N T This writ petition is filed by the petitionerseeking for a direction to release the gold articlesseized vide Exts.P1, P1(a) and P1(b) to the petitioner,accepting the security by way of deposit of title deedsof the property and declaration, without insisting forregistration of Mortgage Deed. 2.The issue arises under the Income Tax Act,1961. The first respondent seized from the petitioneron 03/11/2009 at Nedumbassery Airport at Cochin as perExts.P1, P1(a) and P1(b) certain gold ornaments andbars. According to the petitioner, he was only acarrier/agent of one Mr.Raphy Jose, Proprietor ofM/s.ARY Gold Designers, Thrissur. It appears that boththe parties together sought for release of the goldarticles and when the Department refused to do so, thepetitioner along with Mr.Raphy Jose as first petitionerfiled W.P.(C).No.34977/2009 wherein this Court directedthe second petitioner therein, namely, the petitioner W.P.(C). No.11404/2010 herein to approach the Commissioner of Income Tax,Thrissur with appropriate request for release of theseized gold, offering to furnish security by way ofimmovable property. It was also directed that theCommissioner of Income Tax, Thrissur or the authoritycompetent in that regard shall take a decision withrespect to release of the gold on accepting propersecurity by way of immovable property, pendingfinalisation of the proceedings. Ext.P7 is thecommunication thereafter issued by the Department tothe petitioner wherein it was directed that apart fromthe draft declaration which has to be amended, aMortgage Deed has to be registered and the cost ofregistration and stamp duty, if any, will have to beborne by the petitioner. This was objected to by thepetitioner by Ext.P8 application stating that thecharges that would be required to be paid forregistering the Mortgage deed would come toRs.8,55,000/-. The property offered is that of hisbrother. Finally, by Ext.P9 communication, the requestof the petitioner for acceptance of the property ascollateral security without Mortgage through registered deed was found not acceptable. 3.Elaborate arguments were raised by both sides,by relying upon various decisions of this Court withregard to the question whether the Mortgage Deed has tobe registered or not. The draft of the declaration hasbeen produced as Ext.P10 along with draft of theMemorandum of Deposit of Title Deeds [Ext.P10(a)].Whereas, according to the Department, it is Exts.R3(B)and R3(C) which are the modified forms of Declarationand the draft of the Mortgage Deed produced along withI.A.No.191/10 to be executed by the parties concerned. deed was found not acceptable. 3.Elaborate arguments were raised by both sides,by relying upon various decisions of this Court withregard to the question whether the Mortgage Deed has tobe registered or not. The draft of the declaration hasbeen produced as Ext.P10 along with draft of theMemorandum of Deposit of Title Deeds [Ext.P10(a)].Whereas, according to the Department, it is Exts.R3(B)and R3(C) which are the modified forms of Declarationand the draft of the Mortgage Deed produced along withI.A.No.191/10 to be executed by the parties concerned. 4.The property offered is that of the brother ofthe petitioner who is a stranger to the transaction.It is in the said circumstance, the Department isinsisting for execution of a registered Mortgage Deed.The liability towards stamp duty will be aroundRs.9,00,000/- which will be a huge sum and, therefore,during the course of arguments, a suggestion was madefor the expeditious completion of the assessmentproceedings within a time limit so that the matter willnot be prolonged further. The above suggestion was W.P.(C). No.11404/2010 -:4:- acceptable to the learned counsel for the petitionerand the Department. But the learned counsel for thepetitioner submitted that the matter has been pendingfor a long time and, therefore, proceedings will haveto be directed to be completed within a period of threemonths. The learned counsel for the Departmentsubmitted that some more time will be required. 5.In the light of the fact that the proceedingshave been pending for more than one year as on todayand to avoid further hardship to the parties concerned,there will be a direction to the competent authorityamong the respondents to complete the process ofassessment and issue final proceedings within a periodof four months from today. The parties will co-operatewith the assessment proceedings. The writ petition isaccordingly disposed of. No costs. (T.R. Ramachandran Nair, Judge.) ms