Wp(C)/34977/2009 Of Raphy Jose v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 11TH DECEMBER 2009 / 20TH AGRAHAYANA 1931 WP(C).No. 34977 of 2009(N) -------------------------- PETITIONER(S): --------------- 1. RAPHY JOSE, PROPRIETOR, M/S.ARY GOLD DESIGNERS, T.C. 4/5277, NEAR BSNL OFFICE, KURIACHIRA, THRISSUR - 680006. 2. SHEEL KUDIYIRIPPEL, KUDIYIRIPPEL HOUSE, METTOOR, KALADY, KERALA. BY ADV. SRI.KMV.PANDALAI SMT.S.HEMALATHA RESPONDENT(S): --------------- 1. THE INCOME TAX OFFICER, WARD 2(3), THRISSUR. 2. THE ASST.DIRECTOR OF INCOME TAX, (INVESTIGATION)-II, ERNAKULAM. 3. THE ASST.DIRECTOR OF INCOME TAX, (INVESTIGATION), THRISSUR. 4. THE COMMISSIONER OF INCOME TAX, THRISSUR. 5. THE CHIEF COMMISSIONER OF INCOME TAX, ERNAKULAM. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.34977 OF 2009 ---------------------------------- Dated this the 11[th] day of December, 2009 JUDGMENT 1. The matter relates to seizure of gold jewellery andbullion, under Section 132 of the Income Tax Act, 1961 (for short'the Act'). On 3.11.2009 gold ornaments and gold bar weighing7179.100 gms were seized from the second petitioner at theCochin International Airport, Nedumbassery, on his arrival fromDelhi. The seizure was effected by the second respondent.According to the petitioner, the second petitioner was only anagent of the first petitioner who is the proprietor of a firm namedM/s.ARY Gold Designers and that the gold which is seized aregiven by M/s.Vinay Jewellry, Delhi, to whom the gold ornamentswere taken by the second petitioner on behalf of the firstpetitioner. The seized gold is the balance ornaments returnedfrom M/s.Vinay Jewellery, is the contention. However,subsequent to seizure of gold ornaments a search was conductedat the business premises of the first petitioner and variousrecords were seized. It is the claim of the petitioner that alldocuments and records seized as well as produced will provethat the gold in question is part of the stock-in-trade of the business of the first petitioner. Grievance of the petitioner isthat in spite of specific request made by the first petitioner asevidenced by Ext.P8, seeking release of the seized articles, nodecision is taken so far by the authority concerned. It iscontended that since the stock-in-trade of the business is undercustody of the respondents, the entire business transactions hasbeen put to stand still. 2. In a statement filed on behalf of respondents it iscontended that, the gold seized belongs to the second petitionerand it pertains to undisclosed personal assets of the secondpetitioner which he was not intended to be disclosed. It isfurther stated that only on the next day of the seizure alone thefirst petitioner had came up with a claim that the gold seized ishis stock-in-trade. It is also stated that subsequent to the surveyconducted at the business place of the first petitioner,statements of various persons were recorded including hisemployees and there are contradictions between the statementswhich will clearly point out that the claim made by the firstpetitioner is only an after thought. The statement furthermentioned that the documents which were available with thesecond petitioner at the time of seizure, suffers from various discrepancies and there was no document which accompaniedthe transport of gold ornaments which will reveal payment ofVAT and other statutory liabilities. discrepancies and there was no document which accompaniedthe transport of gold ornaments which will reveal payment ofVAT and other statutory liabilities. 3. From the facts stated above, it is clear that therespondents are now proceeding with further steps, pursuant tothe search and seizure. But the limited prayer of the petitionersis for a release of the seized gold pending finalisation of suchproceedings. It is evident from the statement of the respondentsthat the allegation of the department is that the seized gold isthe undisclosed asset of the second petitioner which he was notintended to be disclosed to the authorities. According to therespondents, the claim of the first petitioner that the goldbelongs to the stock-in-trade of his firm cannot be accepted.However, all these matters needs adjudication while finalisingthe proceedings which are now initiated pursuant to the seizureand search. 4. Learned counsel for the petitioner submitted that evenon assuming the stand taken by the department is correct, thereis no hurdle for the department to release the seized gold to thesecond petitioner on the basis of proper security. LearnedStanding Counsel on the other hand submitted that the second petitioner can approach the authority concerned with such arequest and the release of the seized articles on the basis ofproper security will be considered. 5. Under the above circumstances, it is made clear that the second petitioner can approach the 4[th] respondent Commissionerwith appropriate request for release of the seized gold, offeringto furnish security by way of immovable property. The 4[th]respondent or the authority competent in this regard shall take adecision with respect to release of the gold on accepting propersecurity by way of immovable property, pending finalisation ofthe proceedings. If any application is made in this regard, thesame shall be considered and a decision thereof shall beintimated to the petitioners within a period of one week from thedate of receipt of such application. C.K.Abdul Rehim, Judge cms