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Issues Involved:
1. Jurisdiction of the Court 2. Interim Relief and Release of Seized Gold Ornaments 3. Compliance with Section 132 of the Income-tax Act, 1961 4. Protection of Revenue Interests Issue-wise Detailed Analysis: 1. Jurisdiction of the Court: The primary issue discussed was whether the Gujarat High Court had jurisdiction to entertain the petition. The respondents argued that since the cause of action arose outside Gujarat, the court lacked jurisdiction. However, the court noted that the petitioner-firm is assessed to income-tax at Ahmedabad, and the gold ornaments were claimed to belong to the petitioner. The court referenced Article 226(2) of the Constitution, stating that if the cause of action arises wholly or in part within the territory of Gujarat, the court would have jurisdiction. The court concluded that prima facie, it appeared to have jurisdiction to deal with the petition, especially considering the petitioner's assessment location and the provisions of Section 132 of the Income-tax Act. 2. Interim Relief and Release of Seized Gold Ornaments: The petitioner sought interim relief for the release of the seized gold ornaments, arguing that they would suffer irreparable loss in the international market if the ornaments were not released. The petitioner provided substantial evidence, including vouchers and statements from the person in possession at the time of seizure, indicating that the gold ornaments belonged to them. The court considered the petitioner's argument that the value of the ornaments could be added to their income if found to be purchased from undisclosed income, and thus, the ornaments should be released against a bank guarantee. 3. Compliance with Section 132 of the Income-tax Act, 1961: The court examined the provisions of Section 132, which deals with search and seizure operations. It noted that the authorized officer could seize assets if they represent undisclosed income. The court highlighted that the statement made by Ashit M. Shah during the seizure clearly indicated that the gold ornaments belonged to the petitioner. The court also referenced sub-sections (4), (5), (7), and (9A) of Section 132, emphasizing that the Assessing Officer should proceed against the petitioner if the seized assets were held on their behalf. The court found that the authorized officer had not fully considered these provisions, which warranted the release of the ornaments under specific conditions. 4. Protection of Revenue Interests: To protect the interests of the Revenue, the court directed that the gold ornaments be released upon the petitioner furnishing a bank guarantee for the value of the ornaments (Rs. 13,66,000). The petitioner was also required to file an affidavit and an undertaking to pay any income tax due if the value of the ornaments was added to their income. The court ensured that the Revenue's interests were safeguarded while granting interim relief to the petitioner. Conclusion: The court ordered the release of the gold ornaments pending the final hearing, subject to the petitioner providing a bank guarantee, affidavits, and undertakings as specified. The court rejected the request to stay the order, emphasizing that the Revenue's interests were adequately protected by the conditions imposed.
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