L. Javerchand Jeweller Pvt. Ltd. and Ramanlal S. Jain V. Assistant Director of Income Tax (INV), Kannur

WP(C)/32229/2008

AI Insights

The case involves L. Javerchand Jeweller Pvt. Ltd., a manufacturer and trader of gold ornaments, and its director, Anand J. Jain, along with Ramanlal S. Jain, an employee, who sought a writ of mandamus from the High Court of Kerala to release assets (gold ornaments) detained by the police. The gold, weighing 1125.000 grams, was seized during a police stop of a taxi carrying the second petitioner and another individual, Sri. Lakshman Chowdhari, who were transporting the gold to Kerala for business purposes. The Magistrate had earlier ordered the gold to be handed over to the Department, which was responsible for its custody and production in court. The petitioners argued that the gold was properly accounted for and belonged to them, supported by various documents including tax returns and a demand draft from a buyer. The Department opposed the release of the gold, citing ongoing proceedings.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 799177 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-11-2008
• Assessment Year: misc
• Laws Referred To: Income Tax Act, Criminal Procedure Code
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P RAGHUNATH
• Keywords: Custody of assets; Gold Ornaments; Income Tax; Mandamus; Detention of assets
• Section: 451

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH WEDNESDAY, THE 12TH NOVEMBER 2008 / 21ST KARTHIKA 1930 WP(C).No. 32229 of 2008(J) -------------------------- PETITIONER(S): --------------------- 1. L. JAVERCHAND JEWELLER PVT. LTD., CHOKSI CHAMBER, SHOP NO.1, BHAVANI MARKET, 2ND FLOOR, IST AGYARI LANE, ZAVERI BAZAR, MUMBAI - 400 002, REP. BY ITS DIRECTOR ANAND J. JAIN. 2. RAMANLAL S. JAIN, S/O. SRI SAKKAR CHAND, KALA CHOWKI ROAD, MIRCHAR, MUMBAI - 400 012. BY ADV. SRI.P.RAGHUNATH RESPONDENT(S): ------------------------ ASSISTANT DIRECTOR OF INCOME TAX (INV), KANNUR. BY SC SRI. JOSE JOSEPH. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. - - - - - - - - - - - - - - - - - - - - - - - - - WP.(C) No.32229 of 2008 - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 12th day of November, 2008 JUDGMENT Petitioners have approached this court seeking mandamus to the respondents to release the assets retained forthwith. Challenge is raised to all further proceedings pursuant to the detention of the assets. Briefly put the case of the petitioners is as follows: First petitioner is the manufacturer and trader in gold ornaments and gold bullion and is an assessee under the Income Tax Act while the second petitioner is one of his employees. On 28.10.2006 the first petitioner sent ornaments weighing 4149.090 grams to Kerala through the second petitioner and one Sri. Lakshman Chowdhari. While the second petitioner and Sri. Lakshman Chowdhari were returning after completing their business, which are more specifically mentioned in the writ petition, the taxi came to be stopped by the police and who took into custody the balance gold covering 1125.000 grams. Crime was registered. First petitioner as also the respondent applied for custody of the gold ornaments under Section 451 of the Criminal Procedure Code. By Ext.P6 order the Magistrate has granted custody of the assets to the Department. Thereafter respondent issued notice to the second petitioner vide Ext.P7 calling for WPC.32229/2008. 2 assessment particulars. First petitioner made Ext.P8 representation requesting to release the gold ornaments, cash and the demand draft taken from the second petitioner. It is pointed out that petitioners are regular assessees under the Income Tax Act. Ext.P9 is produced as copy of the acknowledgment for the return for the period ended 31.10.2007. It is the case of the petitioners that petitioner has produced all the evidences to show that the seized assets belong to them and it had been properly accounted. In particular reference is made to the demand draft in the name of the first petitioner for Rs.2,36,241/- payable at Mumbai received from Ms. Talal Gold Palace, Thalasserry and it is confirmed by the buyer vide Ext.P4. So also reliance is placed on Exts.P1, P2 and P5. 2. I heard learned counsel for the petitioners Sri. Premjit Nagendran and Sri.Jose Joseph, counsel appearing for the Department. 3. Learned counsel for the petitioners would submit that the gold may be released to the first petitioner. This is opposed by the learned counsel for the respondent. There is an order passed under Section 451 of the Cr.P.C., where the gold was given over to the Department. I do not see any justification in the prayer of the petitioners to give back the gold ornaments to the first petitioner. Proceedings are not yet completed and also the person, to whom the gold is given by the Magistrate and who is WPC.32229/2008. 3 responsible to produce the same before the Magistrate is the Department. Learned counsel for the petitioners submits that the matter is pending for a period of two years and there may be a direction to complete the proceedings expeditiously. I see that the request of the petitioners is reasonable. Learned counsel for the respondent would submit that the jurisdictional officer is the Income Tax Officer, Ward 17(3)(4), 6th Floor, Piramel Chambers Parel, Mumbai 400 012. At any rate he submits that proceedings will be completed within a period of six months from today. I record the said submission. The writ petition is disposed of directing that the proceedings will be completed within a period of six months from today. If the second petitioner takes the stand that the first petitioner is the owner of the gold, necessarily notice must be issued to the first petitioner and he must also be given an opportunity of hearing before passing orders. (K.M. JOSEPH, JUDGE) sb "