THE DEPUTY COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES V. THE DEPUTY DIRECTOR OF INCOME TAX (INV)-II, ERNAKULAM

WP(C)/17650/2014

AI Insights

The case involves the State of Kerala, represented by the Deputy Commissioner (Intelligence), Commercial Taxes, Ernakulam, seeking to prevent the release of diamond jewellery that was seized by income tax authorities under Section 132 of the Income Tax Act, 1961. The jewellery was initially found in possession of respondents 3 and 4 at the airport and was later seized due to lack of proper documentation. The High Court of Bombay had earlier ordered the release of the jewellery, which the State contested, citing ongoing tax recovery proceedings under the Kerala Value Added Tax Act, 2003. The court ultimately found the writ petition to be infructuous due to the attachment of the jewellery by the income tax department.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755749 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 22-07-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Kerala Value Added Tax Act, 2003, Kerala Revenue Recovery Act, 1968
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: GEORGE MECHERIL
• Keywords: Commercial tax; Income Tax; Jurisdiction; Release of goods; Seizure; Diamond jewellery
• Section: 132; 33; 67(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY , THE 22ND DAY OF JULY 2014/31ST ASHADHA, 1936 WP(C).No. 17650 of 2014 (E) ---------------------------- PETITIONER: -------------------------- THE DEPUTY COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES, ERNAKULAM. BY SPL.GOVERNMENT PLEADER SRI.GEORGE MECHERIL RESPONDENTS: ---------------------------- 1. THE DEPUTY DIRECTOR OF INCOME TAX (INV)-II, ERNAKULAM. 2. M/S.FANCY DIAMONDA INDIA (P) LTD., 111, PRASAD CHAMBERS, OPERA HOUSE, MUMBAI - 400 004. 3. PRATIK MEHTA, 12, SHOUBNA BUILDING, MATHURADAS ROAD, KANDIVIL (WEST), MUMBAI - 400 067. 4. APOORVA SHAH, 2-1, CHAROTAR PARK, OLD PADRA ROAD, BARODA - 390 020. R1 BY ADV. SRI. JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22-07-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss K.VINOD CHANDRAN, J. --------------------------------------- W.P(C).No.17650 of 2014 ---------------------------------------- Dated this the 22nd day of July, 2014 J U D G M E N T Petitioner is the State, which seeks a stay of the release of the diamond ornaments, directed to be released by the High Court of Bombay as per Ext.P15. The short facts are that the respondents 3 and 4 were detained, at the airport by the Air Intelligence Unit, and huge quantity of diamond jewellery were found in their possession. Since no proper documents, accompanied such goods, the same was seized subsequently by the income tax authorities under Sec.132 of the Income Tax Act, 1961. The income tax authorities also informed the commercial tax authorities, within the State, about such seizure. 2. A notice was issued, as Ext.P3 under Sec.67(1), of the Kerala Value Added Tax Act, 2003 alleging that the goods were intended for sale within W.P(C).No.17650 of 2014 2 the State of Kerala. Admittedly, an order was passed imposing penalty, at twice the amount of tax sought to be evaded, by Ext.P10. An appeal is said to be pending, in which no order of stay is passed. Demand notices have also been issued. It was in the meantime, that the second respondent, who claimed ownership of the jewellery, approached the High Court of Bombay, within whose jurisdiction the respondents 2 to 4 function and the 2nd respondent is registered and as an assessee under the Income Tax Act. The High Court of Bombay granted release of the goods, as per Ext.P15. Petitioner-State has filed the above writ petition contending that the diamond jewellery, is not liable to be released, since the Commercial Tax Department has raised a claim over it. The jurisdictional aspects come to fore in considering the above Writ Petition. 2. In any event, now it is brought to the notice of this Court, that under Sec.33 of the KVAT Act, 2003 the Assistant Commissioners, of the Commercial Tax W.P(C).No.17650 of 2014 3 Department have been notified, to exercise the functions of a Collector, under the Kerala Revenue Recovery Act, 1968. It is submitted by the Special Government Pleader (Taxes) appearing for the petitioner-State that now proceedings have been taken and the diamond jewellery, with the income tax department, have been attached. In such circumstance, the writ petition is no longer necessary. The writ petition is hence infructuous. Sd/- K.VINOD CHANDRAN, Judge Sbna "