SHEEL KUDIYIRIPPIL V. THE ASSISTANT DIRECTOR OF INCOME TAX

WP(C)/11404/2010

AI Insights

The case involves a writ petition filed by Sheel Kudiyirippil seeking the release of gold articles seized by the Income Tax Department at Nedumbassery Airport, Cochin. The petitioner, acting as a carrier for Mr. Raphy Jose, faced refusal from the Department to release the seized gold unless a Mortgage Deed was registered, which was financially burdensome. The court had previously directed the petitioner to approach the Commissioner of Income Tax, Thrissur, offering immovable property as security. After negotiations and submissions, including a draft declaration and memorandum of deposit of title deeds, the Department insisted on a registered Mortgage Deed due to the property being offered by the petitioner's brother, a stranger to the transaction. The court, considering the prolonged proceedings and the financial burden on the petitioner, directed the completion of the assessment process within four months.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 764823 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 06-01-2011
• 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: Income Tax; Mortgage Deed; Security Deposit; Title deeds; Gold articles seizure

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 6TH JANUARY 2011 / 16TH POUSHA 1932 WP(C).No. 11404 of 2010(A) -------------------------- PETITIONER : -------------------- SHEEL KUDIYIRIPPIL, KUDIYIRIPPIL HOUSE, MATTOOR, KALADY, KERALA. BY ADVS. SRI.KMV.PANDALAI SMT.S.HEMALATHA RESPONDENT(S): ------------------------- 1. THE ASSISTANT DIRECTOR OF INCOME TAX, (INVESTIGATION)-II, ERNAKULAM. 2. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, ERNAKULAM. R1 TO R3 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/12/2010, THE COURT ON 06/01/2011 DELIVERED THE FOLLOWING: Mn T.R. RAMACHANDRAN NAIR, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C). No.11404/2010-A ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 6th day of January, 2011 J U D G M E N T This writ petition is filed by the petitioner seeking for a direction to release the gold articles seized vide Exts.P1, P1(a) and P1(b) to the petitioner, accepting the security by way of deposit of title deeds of the property and declaration, without insisting for registration of Mortgage Deed. 2. The issue arises under the Income Tax Act, 1961. The first respondent seized from the petitioner on 03/11/2009 at Nedumbassery Airport at Cochin as per Exts.P1, P1(a) and P1(b) certain gold ornaments and bars. According to the petitioner, he was only a carrier/agent of one Mr.Raphy Jose, Proprietor of M/s.ARY Gold Designers, Thrissur. It appears that both the parties together sought for release of the gold articles and when the Department refused to do so, the petitioner along with Mr.Raphy Jose as first petitioner filed W.P.(C).No.34977/2009 wherein this Court directed the second petitioner therein, namely, the petitioner W.P.(C). No.11404/2010 -:2:- herein to approach the Commissioner of Income Tax, Thrissur with appropriate request for release of the seized gold, offering to furnish security by way of immovable property. It was also directed that the Commissioner of Income Tax, Thrissur or the authority competent in that 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. Ext.P7 is the communication thereafter issued by the Department to the petitioner wherein it was directed that apart from the draft declaration which has to be amended, a Mortgage Deed has to be registered and the cost of registration and stamp duty, if any, will have to be borne by the petitioner. This was objected to by the petitioner by Ext.P8 application stating that the charges that would be required to be paid for registering the Mortgage deed would come to Rs.8,55,000/-. The property offered is that of his brother. Finally, by Ext.P9 communication, the request of the petitioner for acceptance of the property as collateral security without Mortgage through registered W.P.(C). No.11404/2010 -:3:- deed was found not acceptable. 3. Elaborate arguments were raised by both sides, by relying upon various decisions of this Court with regard to the question whether the Mortgage Deed has to be registered or not. The draft of the declaration has been produced as Ext.P10 along with draft of the Memorandum of Deposit of Title Deeds [Ext.P10(a)]. Whereas, according to the Department, it is Exts.R3(B) and R3(C) which are the modified forms of Declaration and the draft of the Mortgage Deed produced along with I.A.No.191/10 to be executed by the parties concerned. 4. The property offered is that of the brother of the petitioner who is a stranger to the transaction. It is in the said circumstance, the Department is insisting for execution of a registered Mortgage Deed. The liability towards stamp duty will be around Rs.9,00,000/- which will be a huge sum and, therefore, during the course of arguments, a suggestion was made for the expeditious completion of the assessment proceedings within a time limit so that the matter will not be prolonged further. The above suggestion was W.P.(C). No.11404/2010 -:4:- acceptable to the learned counsel for the petitioner and the Department. But the learned counsel for the petitioner submitted that the matter has been pending for a long time and, therefore, proceedings will have to be directed to be completed within a period of three months. The learned counsel for the Department submitted that some more time will be required. 5. In the light of the fact that the proceedings have been pending for more than one year as on today and to avoid further hardship to the parties concerned, there will be a direction to the competent authority among the respondents to complete the process of assessment and issue final proceedings within a period of four months from today. The parties will co-operate with the assessment proceedings. The writ petition is accordingly disposed of. No costs. Sd/- (T.R. Ramachandran Nair, Judge.) ms "