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TMI Blog2018 (5) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... Case of Diomondstar Exports Ltd. & Ors.(2004 (12) TMI 74 - BOMBAY High Court) and CIT Versus Vindhya Metal Corporation, reported in [1997 (3) TMI 3 - SUPREME Court] followed wherein held merely because there is an intimation that a person is with possession of certain jewelry or ornaments was not sufficient ground for purpose of action under Section 132 and seizure was held to be invalid. - Decided in favour of assessee. - S. B. Civil Writs No. 17508/2017 - - - Dated:- 27-4-2018 - Sanjeev Prakash Sharma, J. For the Petitioner : Mr. N. Ramachandran, Adv. Mr. Vijay Choudhary, Adv. For the Respondent : Mr. Anuroop Singhi, Adv. Mr. Saurabh Jain, Adv. ORDER 1. The petitioners by way of this writ petition seeks quashing and setting aside the order dated 19.07.2017 passed by the Assistant Commissioner (Income Tax) Circle-1, Jaipur under Section 132 B of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961 ) and further pray to direct the respondents to release 583 pieces of jewelry seized by them. 2. The brief facts need to be noted are that the petitioner No.2- Anuj Ajmera (hereinafter referred to as AA ) alongwith two other sales executive of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners have submitted before the authorities that concerned jewelry seized was part of stock-in-trade. The petitioner No.1- company which is a manufacturer of jewelry goods and the petitioner No.2 is the employee/marketing executive of it and was authorized to carry in his possession the goods in question for sale while travelling on a tour within India for marketing and sale of its products and an affidavit in this regard has been filed by the Authorised Officer of the employer company. There was no occasion for the respondents to have withheld the seized goods. It is submitted that the 583 items contains serial numbers and several copies of tax invoice were also filed. The transaction memos carrying petitioner No.1 Company s name duly corroborating business transacted by petitioner No.2 during the visit, were also placed. The boarding pass of Jet Airways for petitioner No.2 having travelled from Jaipur to New Delhi was also filed. The Block Insurance Policy covering risk attached with the regular transfer of goods was also filed. In the circumstances, when he was travelling from Jaipur to New Delhi after having delivered 62 items of jewellery on approval basis to different cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Ors.), decided on 23rd February, 2017, to support his submissions. 7. Per contra, learned counsel for the respondent has taken this Court to the order and submits that the goods were seized from custody of petitioner No.2 and the manner in which the business was conducted by the company i.e. petitioner No.1 left many questions unanswered and no conclusion can be drawn as to whether the jewellery belonged to the petitioner No.2 or to the petitioner No.1 and prays that the same can be finalized only after the assessments are finalized. The Authority has rightly taken a decision not to release the seized assets. It is submitted that the assessment of petitioner No.2 is pending under Section 153A and it would be prejudicial to the interest of revenue to release the seized jewellery before the assessments proceedings are completed. Learned counsel has also submitted that there is a CBDT instructions dated 1st December, 2006. He also relies on judgment passed by Supreme Court in the case of Director General of Income Tax (Investigation), Pune And Others Vs. Spacewood Furnishers Private Limited And Others, reported in (2015) 12 Supreme Court Cases 179 to submit that a warrant of au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acy and freedom of the taxpayer, the power must be exercised strictly in accordance with the law and only for the purposes fro which the law authorises it to be exercised. If the action of the officer issuing the authorisation, or of the designated officer is challenged the officer concerned must satisfy the Court about the regularity of his action. If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the Court. If the conditions for exercise of the power are not satisfied the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers any error of judgment on the part of the Officers will not vitiate the exercise of the power. Where the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated officer to enter and search premises for books of account and documents relevant to or useful for any proceeding under the Act, the Court in a petition by an aggrieved person cannot be asked to substitute its own opinion whether an order authorising search should have been issued. Again, any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person against whom the warrant is issued at that stage. 8.6 Such reasons, however, may have to be placed before the Court in the event of a challenge to formation of the belief of the authorised official in which event the court (exercising jurisdiction under Article 226) would be entitled to examine the relevance of the reasons for the formation of the belief though not the sufficiency or adequacy thereof. From above, it is apparent that the issue involved before the Apex Court was in relation to the satisfaction of the authorities while carrying out seizure. However, in the present case after the High Court had earlier remanded the matter to the respondents for taking a decision relating to release of the goods, it was incumbent upon the respondents to have examined the question only with regard to release and a subjective satisfaction was required to arrived at whether the jewellery was part of stock-in- trade of petitioner No.1 and whether the petitioner No.2 was duly authorized by the petitioner No.1 for the purpose of transaction, selling and putting up for approval. A look at the impugned order, however shows that the authority has proceeded to question in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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