Wp(C)/24585/2007 Of Prakash Gold Palace (P)Ltd v. Asst.commr. Of Income Tax & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR WEDNESDAY, THE 22ND AUGUST 2007 / 31ST SRAVANA 1929 WP(C).No. 24585 of 2007(B) -------------------------- PETITIONER: ------------ 1. PRAKASH GOLD PALACE (P) LTD 39/358 B, POOTHULLIL HOUSE, IIND FLOOR, MONASTERY ROAD, COCHIN-11,REPRESENTED BY ITS AUTHORIZED SIGANATORY S.K.CHAKRABORTHY 2. KARUNDUTT SINGH (ALIAS RINGHU SINGH POOTHULIL HOUSE, MONASTERY ROAD, KOCHI-11. BY ADV. SRI.A.KUMAR RESPONDENTS: ------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1,ERNAKULAM. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, I.S.PRESS ROAD, COCHIN. 3. THE CHIEF COMMISSIONER OF INCOME TAX COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/08/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR, J. ....................................................................W.P.(C) No.24585 of 2007 .................................................................... Dated this the 22nd day of August, 2007. JUDGMENT The petitioners are challenging the condition imposed under Ext.P9for release of gold seized from the second petitioner which is claimed asbelonging to the first petitioner. I heard counsel for the petitioners andStanding Counsel for Income Tax Department. Since adjudicationproceedings is pending consequent upon seizure and taking into account thetax effect and the maximum penalty, the first respondent has demandedBank Guarantee for full value of the gold ornaments for it's release pendingadjudication. The first petitioner's case is that the ornaments belong to thecompany and is part of stock in trade and first petitioner is remittingmassive amounts of income tax. Having regard to the contentions raisedand since first petitioner's claim is admitted by second petitioner as well andsince maximum rate of tax payable is 30% and even if the entire value ofgoods is treated as escaped income, the maximum tax and equal amounttowards penalty will account for 70% of it's value and since first petitioneris an assessee, W.P. is disposed of modifying Ext.P9 directing the firstrespondent to release the entire goods to the petitioners on petitioners together or first petitioner executing Bank Guarantee for 70% of the value of the goods and on both petitioners jointly executing a simple bond withoutsurety for the balance 30% in favour of the first respondent. pms C.N.RAMACHANDRAN NAIRJudge