Wp(C)/15190/2009 Of Ms.saseendra Jewellery,Kannur v. The Asst.commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC THURSDAY, THE 8TH DAY OF NOVEMBER 2012/17TH KARTHIKA 1934 WP(C).No. 15190 of 2009 (P) --------------------------- PETITIONER: ---------- MS. SASEENDRA JEWELLERY, HIGH SCHOOL ROAD, PANOOR, KANNUR DISTRICT REPRESENTED BY MANAGING PARTNER SRI. BALAN. BY ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENTS: ----------- 1. ASST. COMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, CALICUT. 2. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOCHI. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON08-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 15190 of 2009 APPENDIX PETITIONER'S EXHIBITS EXT.P1. COPY OF ORDER DATED 29-04-2005. EXT.P2. COPY OF LETTER DATED 10-=03-2006 EXT.P3. COPY OF REQUEST DATED 08-04-2009. /TRUE COPY/ kvr/ P.A. TO JUDGE ANTONY DOMINIC,J -------------------------------- W.P.(C)No.15190 of 2009 ------------------------------------- Dated this the 8[th ] day of November, 2012 JUDGMENT Petitioner is a jeweller. On 24.11.2000, petitioner's premises was searched under Section 132 of the IncomeTax Act. During the search, gold ornaments weighing19014 grams valued at the rate of Rs.79,85,880/- wereseized. Block assessment for the block period 1991-92 to2001-2002 under Section 158BC was completed and goldornaments weighing 18666.075 grams valued atRs.78,40,130/- were treated as unexplained stock andbrought to tax. Similarly, silver articles weighing 2492.67grams valued at Rs.17,449/- were also treated asunexplained stock and brought to tax. The assessmentresulted in tax demand of Rs.52,80,294/-. 2. In appeal filed by the assessee, the Appellate Commissioner brought down the value of undisclosedincome to Rs.62,56,273/-. Insofar as 8640.330 grams of W.P.(C).No.15190/2009 : 2 : gold claimed to have been purchased from a dealer in Ahmedabad is concerned, the Commissioner remitted thematter to the assessing authority to decide the issue.Against the remand order of the Appellate Commissioneralone, Department filed appeal before the Tribunal and theCommissioner's order was set aside and was directed theCommissioner(Appeals) to consider the issue on merits.The matter was pending before the Commissioner(Appeals).It was at that stage, after making a request to respondents,the petitioner filed this writ petition, with the followingprayers: A. Under Sec.132B(i) of the IT Act, the assets seizedunder Sec.132(1)(B)(iii) and retained by therespondents are liable to be adjusted, against anyamounts that may be found due on completion ofassessment for the Block Period. In the instantcase, the assessment was completed as per orderdated 25.11.2002 and thereafter revised as perExt.P1 Revised Order. The first respondent wastherefore bound to adjust the amounts due as perExt.P1 order by sale of sufficient quantity of goldornaments retained by the Department. The refusalunder Sec.132(1)(B)(iii) and retained by therespondents are liable to be adjusted, against anyamounts that may be found due on completion ofassessment for the Block Period. In the instantcase, the assessment was completed as per orderdated 25.11.2002 and thereafter revised as perExt.P1 Revised Order. The first respondent wastherefore bound to adjust the amounts due as perExt.P1 order by sale of sufficient quantity of goldornaments retained by the Department. The refusal W.P.(C).No.15190/2009 on his part to sell the same and carry out suchadjustment is totally illegal and arbitrary. adjustment is totally illegal and arbitrary. W.P.(C).No.15190/2009 on his part to sell the same and carry out suchadjustment is totally illegal and arbitrary. adjustment is totally illegal and arbitrary. B. The first respondent ought to have noticed that thepetitioner have expressed their inability to raisefunds to clear the amount demanded andconsequently requested to sell the adjust theamounts due by selling sufficient part of the assetsseized which the respondent was liable to do.petitioner have expressed their inability to raisefunds to clear the amount demanded andconsequently requested to sell the adjust theamounts due by selling sufficient part of the assetsseized which the respondent was liable to do. 3. From the statement filed by the respondents, itappears that following the remand by Tribunal, the appealwas pending consideration of the Appellate Commissioner.It is also seen that on the petitioner's request for disposal ofsufficient quantity of gold ornaments or to return the goldretaining sufficient quantity with the Department tosafeguard the interest of the revenue, the Commissioner ofIncome Tax passed orders and accordingly, one kilogram ofgold, out of the gold ornaments seized was released tothem on 06.08.2009. Further, it is also stated that since theassessment has not become final, the balance gold isretained with the department to safeguard the interest ofthe revenue for realising the demands that may ultimately W.P.(C).No.15190/2009 be decided. According to respondents, the probable total liability is more than Rs.1.53 crores and the gold remainingwith the department was only 5094 grams, which is valuedat Rs.76,41,000/-. Thus, assessment proceedings are still not complete and one kilogram of gold has been released to the petitionerafter this writ petition was filed and what is held by theDepartment is, according to the Department, insufficient torealise the probable demand. In such circumstances, theprayer sought in this writ petition, cannot be granted andtherefore, the writ petition is dismissed. This shall bewithout prejudice to the right of the petitioner to seekappropriate orders once the assessment proceedingsattained finality. ln Sd/- ANTONY DOMINIC, JUDGE