RAPHY JOSE V. THE INCOME TAX OFFICER

WP(C)/34977/2009

AI Insights

The case involves the seizure of gold jewellery and bullion under Section 132 of the Income Tax Act, 1961, from the second petitioner at Cochin International Airport. The gold was allegedly part of the stock-in-trade of the first petitioner's firm, ARY Gold Designers, but the respondents contended it was the undisclosed personal asset of the second petitioner. The court did not resolve the ownership dispute but allowed the second petitioner to seek the release of the gold by providing security, pending the finalization of the proceedings.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 761419 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 11-12-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: K M V PANDALAI; S HEMALATHA
• Keywords: Search and seizure; Seizure of gold; Stock-in-Trade; Undisclosed personal assets
• Section: 132

Judgement Text

" 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: C.K.ABDUL REHIM, J --------------------------------- WP(C) No.34977 OF 2009 ---------------------------------- Dated this the 11th day of December, 2009 JUDGMENT 1. The matter relates to seizure of gold jewellery and bullion, under Section 132 of the Income Tax Act, 1961 (for short 'the Act'). On 3.11.2009 gold ornaments and gold bar weighing 7179.100 gms were seized from the second petitioner at the Cochin International Airport, Nedumbassery, on his arrival from Delhi. The seizure was effected by the second respondent. According to the petitioner, the second petitioner was only an agent of the first petitioner who is the proprietor of a firm named M/s.ARY Gold Designers and that the gold which is seized are given by M/s.Vinay Jewellry, Delhi, to whom the gold ornaments were taken by the second petitioner on behalf of the first petitioner. The seized gold is the balance ornaments returned from M/s.Vinay Jewellery, is the contention. However, subsequent to seizure of gold ornaments a search was conducted at the business premises of the first petitioner and various records were seized. It is the claim of the petitioner that all documents and records seized as well as produced will prove that the gold in question is part of the stock-in-trade of the 2 business of the first petitioner. Grievance of the petitioner is that in spite of specific request made by the first petitioner as evidenced by Ext.P8, seeking release of the seized articles, no decision is taken so far by the authority concerned. It is contended that since the stock-in-trade of the business is under custody of the respondents, the entire business transactions has been put to stand still. 2. In a statement filed on behalf of respondents it is contended that, the gold seized belongs to the second petitioner and it pertains to undisclosed personal assets of the second petitioner which he was not intended to be disclosed. It is further stated that only on the next day of the seizure alone the first petitioner had came up with a claim that the gold seized is his stock-in-trade. It is also stated that subsequent to the survey conducted at the business place of the first petitioner, statements of various persons were recorded including his employees and there are contradictions between the statements which will clearly point out that the claim made by the first petitioner is only an after thought. The statement further mentioned that the documents which were available with the second petitioner at the time of seizure, suffers from various 3 discrepancies and there was no document which accompanied the transport of gold ornaments which will reveal payment of VAT and other statutory liabilities. 3. From the facts stated above, it is clear that the respondents are now proceeding with further steps, pursuant to the search and seizure. But the limited prayer of the petitioners is for a release of the seized gold pending finalisation of such proceedings. It is evident from the statement of the respondents that the allegation of the department is that the seized gold is the undisclosed asset of the second petitioner which he was not intended to be disclosed to the authorities. According to the respondents, the claim of the first petitioner that the gold belongs to the stock-in-trade of his firm cannot be accepted. However, all these matters needs adjudication while finalising the proceedings which are now initiated pursuant to the seizure and search. 4. Learned counsel for the petitioner submitted that even on assuming the stand taken by the department is correct, there is no hurdle for the department to release the seized gold to the second petitioner on the basis of proper security. Learned Standing Counsel on the other hand submitted that the second 4 petitioner can approach the authority concerned with such a request and the release of the seized articles on the basis of proper security will be considered. 5. Under the above circumstances, it is made clear that the second petitioner can approach the 4th respondent Commissioner with appropriate request for release of the seized gold, offering to furnish security by way of immovable property. The 4th respondent or the authority competent in this regard shall take a decision with respect to release of the gold on accepting proper security by way of immovable property, pending finalisation of the proceedings. If any application is made in this regard, the same shall be considered and a decision thereof shall be intimated to the petitioners within a period of one week from the date of receipt of such application. C.K.Abdul Rehim, Judge cms "