1980 (10) TMI 30 - HC - Income Tax

Issues Involved:
1. Seizure of Gold Jewellery
2. Voluntary Disclosure of Income and Wealth Act Compliance
3. Compliance with the Gold (Control) Act
4. Immunity from Penalty and Prosecution
5. Jurisdiction and Authority of Central Excise Department

Issue-wise Detailed Analysis:

1. Seizure of Gold Jewellery:
The petitioner, a widow, sought a writ of mandamus for the release of 21,660 grams of gold jewellery seized from her residence on September 3, 1972, by the intelligence wing of the Income Tax Department. The seizure included old and new gold jewellery and primary gold worth Rs. 4,48,319. The ITO determined the total income at Rs. 6,90,390 and the tax liability at Rs. 6,30,775.

2. Voluntary Disclosure of Income and Wealth Act Compliance:
The petitioner filed voluntary returns under Sections 14(1) and 15 of the Voluntary Disclosure of Income and Wealth Act, 1976. She paid Rs. 3,11,740 in taxes before March 31, 1976, and complied with all formalities under Section 16A of the Act. The Deputy Director of Inspection initially agreed to release the gold but later withheld it due to lack of concurrence from the Collector of Central Excise (Gold).

3. Compliance with the Gold (Control) Act:
The Collector of Central Excise (Gold) argued that since the gold was seized before the Voluntary Disclosure Act, the petitioner could not claim immunity. He stated that the petitioner violated the Gold (Control) Act by not submitting a declaration under Section 16(7) and that the seized gold was liable for confiscation under Section 71 of the Gold (Control) Act. The petitioner's son had declared only 6,394 grams of gold, and the rest was not disclosed.

4. Immunity from Penalty and Prosecution:
The court held that the petitioner had made a voluntary disclosure as required by Sections 14 and 15 of the Act and paid the necessary taxes. The gold and gold jewellery remained the petitioner's property until the Income Tax authorities exercised their power of sale under Section 132B(1)(iii). The court found that the petitioner had complied with the Voluntary Disclosure Act and the Gold (Control) Act, thus entitling her to immunity from penalty and prosecution. The petitioner had made the necessary entries in the registers and informed the Assistant Collector of Central Excise, who verified and signed the entries.

5. Jurisdiction and Authority of Central Excise Department:
The court rejected the argument that the gold was seized under the Gold (Control) Act by the Central Excise authorities. The search and seizure were conducted by the Income Tax Department, and the Central Excise authorities merely assisted. The court also dismissed the claim that proceedings under the Gold (Control) Act were pending at the time of the voluntary disclosure. The court concluded that the petitioner was entitled to the release of the gold and gold jewellery as the necessary formalities were complied with, and no proceedings were pending under the Gold (Control) Act at the time of the voluntary disclosure.

Judgment:
The court allowed the writ petition and issued a writ of mandamus directing the respondents to release the gold and gold jewellery seized from the petitioner on September 3, 1972, as per the seizure report. There was no order as to costs.

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