2021 (9) TMI 867 - HC - Income Tax

Release the gold jewellery which were seized during the course of search - HELD THAT - It is the failure on the part of the respective parties to the lis in placing the correct facts before this Court. If the order already passed on 04.11.2019 is allowed to be executed then prejudice would be caused to the interest of the Revenue. Once an error apparent is brought to the notice of this Court at the instance of the parties, and further such a fact is important for the purpose of determining the issues, then it is necessary to review the order passed. As brought to the notice of this Court that as per the seizure Mahazar, the jewellery seized from the writ petitioner's premises is valued more than ₹ 8 crores. Thus, the respondent-Department is directed to consider the applications filed by the writ petitioner on 13.11.2017 and on 28.11.2017 for release of jewellery. While considering such applications, the respondent- Department is directed to retain the jewellery worth equal to the tax liability along with the interest and consider releasing of the remaining jewellery by following the procedures as contemplated under law. The said exercise is directed to be done as expeditiously as possible and preferably, within a period of four weeks from the date of receipt of a copy of this order.

Summary

Issues:
Release of seized gold jewelry during pending assessment.

Analysis:
The petitioner sought the release of gold jewelry seized during a search. However, as per Section 132B(i) of the Income Tax Act, assets seized cannot be released if any assessment was pending at the relevant time. An error was found in the case where the assessment order for the year 2013-14 was completed before the writ petition order, but this fact was not brought to the court's attention. The court noted that both parties failed to present accurate facts, causing prejudice to the Revenue's interest.

The court acknowledged that the tax liability for the petitioner was determined in the assessment order passed in 2018, and the tax liability was not brought to its notice during the previous order. The respondent argued that retaining jewelry worth over ?8 crores when the tax liability was around ?1,04,00,000 was unnecessary, especially when the jewelry was in use by family members. The court emphasized the importance of presenting correct facts and decided to review the previous order due to the error apparent on record.

The court directed the Department to consider the petitioner's applications for jewelry release and retain jewelry equal to the tax liability, releasing the rest following legal procedures. The Department was instructed to complete this process within four weeks. Consequently, the review application was allowed, the writ petition was disposed of, and no costs were awarded.