2023 (3) TMI 216 - HC - Income Tax

Release the seized gold ornaments u/s 132B - unresponsiveness of the respondent Nos. 1 and 2 to the application of the petitioner made u/s 132B to release the seized gold ornaments on the ground that this is illegal action on the part of the respondent - HELD THAT - Following the very decisions in case of Ashish Jayantilal Sanghavi Vs. Income Tax Officer 2022 (4) TMI 1285 - GUJARAT HIGH COURT this court decided the very issue where, the Assessee -Company had filed various applications for release of diamonds seized during the search conducted upon the company under Section 132B of the I.T. Act. However, the revenue retained the assets even after the expiry of 120 days from date of last authorization for search, such seized diamonds were released to the assessee, according to the Court in view of provision of Section 132B. This writ application succeeds and is hereby allowed. The respondents are directed to hand over the seized asset (gold ornaments) to the writ applicant within a period of four weeks from the date of receipt of the writ of this order.

Issues Involved:
1. Legality of the seizure of gold ornaments.
2. Non-responsiveness of the respondents to the application under Section 132B of the Income Tax Act.
3. Time frame for the release of seized assets under Section 132B.
4. Compliance with procedural requirements for the retention of seized assets.

Issue-wise Detailed Analysis:

1. Legality of the Seizure of Gold Ornaments:
The petitioner, a sole proprietor engaged in the manufacturing and trading of gold and silver jewelry, was intercepted at Lalbahadur Shastri Airport, Varanasi, and his gold ornaments weighing 3230.550 grams were seized. The petitioner argued that the seized gold ornaments were stock-in-trade and thus should not have been seized but only inventoried. An application was filed on 26th October 2020, requesting the release of the seized gold ornaments on this ground.

2. Non-responsiveness of the Respondents to the Application under Section 132B of the Income Tax Act:
The petitioner filed an application under Section 132B(1)(i) of the Income Tax Act on 10th March 2021, following the Allahabad High Court's direction to move a proper application before the Assessing Authority at Rajkot. However, no reply was received from the respondents, leading to the petitioner's grievance regarding the non-action by the respondents on the application.

3. Time Frame for the Release of Seized Assets under Section 132B:
The court noted that the statutory provision of Section 132B mandates that an application for the release of seized assets must be made within 30 days from the end of the month in which the assets were seized. The assets must be released within 120 days from the date of the last authorization for search or requisition. The court referenced the case of Nadim Dilip Bhai Panjvani vs. Income Tax Officer, where the delayed decision on the application for the release of seized assets was deemed unacceptable.

4. Compliance with Procedural Requirements for the Retention of Seized Assets:
The court emphasized the importance of adhering to the time frame provided under Sections 132A and 132B of the Income Tax Act. It was noted that the failure to decide on the application within the prescribed time frame would necessitate the release of the seized assets. The court cited multiple precedents, including Mitaben R. Shah vs. Deputy Commissioner of Income Tax and Cowasjee Nusserwanji Dinshaw vs. Income Tax Officer, to underscore the illegality of retaining seized assets beyond the stipulated period without proper communication and approval.

Conclusion:
The court directed the concerned officer to decide on the petitioner's application within two weeks from the date of receipt of the order. The petition was disposed of with this direction, emphasizing the mandatory nature of the time limits under Section 132B and the requirement for prompt action by the assessing authorities.

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