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TMI Blog2015 (9) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff was a registered partnership firm and Dharam Pal Goel was its registered partner, who had filed the suit. During the financial years 1992-1993 to 1995-1996, the appellant-plaintiff firm had been carrying on the business of paddy shelling/husking under the name and style of M/s Paras Rice Mills, Kurukshetra. The appellant-plaintiff firm had been filing income tax returns regularly in the office of Income Tax Officer, Kurukshetra. The accounts of the appellantplaintiff firm for the financial year ending on 31.3.1996 were audited by M/s Ajay Mittal & Co. Chartered Accountant of Ambala Cantonment. As per the report dated 26.7.1996, no illegality or irregularity was found in the account books. The income tax return filed by appellant-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promulgated deemed seizure order on 17.10.1995 on the following items which were subjected to natural decay being perishable in nature:- 1. Rice superfine : 1553 quintals 61 kgs. 2. Rice Bran : 61 quintals 70 kgs. 3. Rice Basmati : 42 quintals 96 kgs (actually 42.04 quintals). 4. Bardana of FCI : 16,000 bags. It was further pleaded that the deemed seizure dated 17.10.1995 passed by respondent-defendant No. 2 was without legs and had been passed in violation of provisions of Income Tax Act, 1961 as well as Code of Civil Procedure, 1908 and Code of Criminal Procedure, 1973. The same was legally unjustified and not sustainable. The representations dated 15.11.1995, 19.6.1996, 13.7.1996 and 5.9.1996 were made to respondent-defendant No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents requesting them to make the payment of Rs. 9 lacs along with interest at the rate of 2% per month, but it could not fetch any positive result. Hence, the suit. Defendant-respondent No.1 did not opt to contest the suit and ultimately, he was proceeded ex parte. Defendant-respondent No.2to4 filed written statement admitting that during the financial year ending on 31.3.1996, the appellant-plaintiff was carrying on the business in the premises of M/s Saraswati Rice Sheller Bye-pass road, Kurukshetra. It was pleaded that the respondent-defendant No. 2 was neither competent to procure nor obtained the search warrants as alleged. The allegations were not only false but defamatory in nature. The search warrants were always issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was every likelihood of accretion of undisclosed income. The seized stock was subsequently sold and the proceeds thereof were adjusted against the outstanding tax demand in the assessee's case. The respondents-defendants had no personal enmity with the appellant-plaintiff firm, therefore, the question of having any intention to cause loss to the appellant-plaintiff firm did not arise at all. The deemed seizure order dated 17.10.1995 was perfectly legal and justified. The stock put under seizure was sold in order to effect the recovery of outstanding tax demand as per the orders of this Court and the said stock was sold at Rs. 675/- per quintal. The stock of basmati rice was sold at Rs. 2016/- per quintal as against the valuation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 10.11.1997 to make payment of full value of stock. Moreover, when the Assistant Commissioner of Income Tax visited the premises of Saraswati Rice Sheller situated at Bye-pass road, Gandhi Nagar, Kurukshetra, it was discovered that the stock was less than the stock placed under deemed seizure. The total stock found in the said premises was as under:- i) Super fine rice : 500 to 600 quintals. ii) Rice Bran. : 44 quintals. It was further pleaded that the said stock of rice was packed in gunny bags with 1997-98 marking whereas deemed seizure was made in the year 1995-96 that too of the stock lying in the premises of M/s Paras Rice Mills. This clearly showed that the said stock was not the same which was placed under deemed seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 CPC? OPD. 6) Relief. Both the parties led their respective evidence. Learned trial Court vide judgment and decree dated 31.8.2010 dismissed the suit of the plaintiff. Feeling dis-satisfied with the aforesaid judgment and decree dated 31.8.2010, the plaintiff filed first appeal and the same was dismissed by the first appellate Court on 4.3.2013. Still feeling dis-satisfied with the aforesaid judgments and decrees, the plaintiff-appellant has directed this regular second appeal. Learned counsel for the appellant, in para no.9 of the grounds of appeal has mentioned that following substantial questions of law have arisen in the instant appeal :- 1) Whether the suit for recovery for the losses caused by the inaction of the respondents in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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