9911796707
TMI Blog1998 (10) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner filed another representation on January 13, 1997 (exhibit P-4), to the second respondent also for the same relief. Since, according to the petitioner, there was no response from the respondents, the present writ petition is filed. In the affidavit filed in support of the writ petition, it is stated that even assuming that a sum of Rs. 39,56,630 advanced by way of loan is unaccounted money and, therefore, undisclosed income the tax payable thereon comes to only Rs. 24,00,000 as mandated by section 113 read with section 158BA(2) of the Act. It is further stated that since it was urgently required to get back the above referred ornaments for meeting the petitioner's obligations to its customers, it was prepared, without prejudice to its other contentions, to furnish collateral security to the extent of Rs. 24,00,000, as the same will secure the alleged interests of the Revenue. The petitioner has offered to furnish as security 22 cents of land in Ernakulam city. A copy of the title deed in respect of the said property is produced as exhibit P-5. The petitioner also produced a valuation report of the authorised valuer as exhibit P-6, an encumbrance certificate as exhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised and without jurisdiction. He further submitted that the power of search and seizure conferred under section 132 of the Act is an extraordinary power, which must be exercised strictly within the four corners of the said provision. It is stated that under clause (c) of sub-section (1) of section 132, the authority can seize only jewellery representing either wholly or partly income or property belonging to the person in possession and since the seized gold ornaments admittedly do not belong to the petitioner the seizure of the same is illegal and unauthorised. In order to substantiate the same counsel referred to the definition of income in section 2(24) of the Act and submitted that the items which can be included in the said definition must be ejusdem generis to the items already mentioned in the said definition. On that basis, he submitted that only amounts received and non-utilisation of the amounts in hand can represent income. Counsel also took me to the meaning of the word "represent" from the Concise Oxford Dictionary. The submission of counsel is that the officer authorised under section 132 can seize only articles which belong to the person whose premises are searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,--- (A) the Director-General or Director or the Chief Commissioner or Commissioner, as the case may be, may authorise any Deputy Director, Deputy Commissioner, Assistant Director, Assistant Commissioner or Income-tax Officer, or (B) such Deputy Director or Deputy Commissioner, as the case may be, may authorise any Assistant Director, Assistant Commissioner or Income-tax Officer,... to---... (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search". In order to understand the scope of the above provision, it is also necessary to refer to certain other provisions of the Act. Section 132(4A)(i) reads as follows : "(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with in the following manner, namely : (i) The amount of the existing liability referred to in clause (iii) of the said sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in clause (i) of that sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (iii) The assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, Tax Recovery Officer unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such jewellery belongs to such person. The above provision gives an indication that the jewellery that can be seized under the section must belong to the person in possession of the same. Sub-section (5) also is relevant in that context. It provides for passing an order within a time-frame for the continued retention of the seized assets to the extent it is necessary to satisfy the amount of tax, interest and other liabilities referred to in clauses (i) to (iii) of the said sub-section. Sub-section (6) also says that the retained assets can be dealt with in accordance with the provisions of section 132B. The said sub-section provides for application of assets retained under sub-section (5) of section 132. Clause (iii) of sub-section (1) of section 132B provides that the assets other than money may also be applied for the discharge of the liabilities provided under clause (i) of the said sub-section and for that purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act, "bailment" is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. Section 173 of the said Act gives a pawnee the right to retain the goods pledged, not only for a payment of the debt or the performance of the promise, but also for the interest of the debt, and all necessary expenses incurred by him in respect of the possession or for the preservation of the goods pledged. Section 176 gives the pawnee a right to bring a suit against the pawner upon the debt or promise, and retain the goods pledged as a collateral security; or sell the pledged goods after reasonable notice to the pawner, if the pawner makes a default in payment of the debt or performance of the promise, at the stipulated time. Section 177 entitles a pawner to redeem the goods until the pawnee has exercised the right to sell the pledged goods. It also provides that if a time is stipulated for the payment of the debt, or performance of the promise, for which the pledge is made, and the pawnor makes a default in payment of the debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to say, a right to sell the property if the loan be not repaid. If the pledgee sells, he does so by virtue and to the extent of the pledgor's ownership and not with a new title of his own. He only holds possession for the purpose of securing to himself the advance which he has made. The pledgee has no right of foreclosure since he never had the absolute ownership at law. In a mortgage, the right to the property is transferred to the creditor; in the case of a pledge, the pledgee has no property in the pawn, but merely a right to sell." The Supreme Court in Lallan Prasad v. Rahmat Ali, AIR 1967 SC 1322, observed that once the debt is satisfied or the engagement extinguishes the pawn, the pawnee on such satisfaction is bound to deliver the property to the pawnor and that the pawnor has an absolute right to redeem the property pledged upon tender of the amount advanced but that right would be lost if the pawnee has in the meantime lawfully sold the property pledged. The Supreme Court further observed that the pawnee's right of sale is derived from an implied authority from the pawnor and such a sale is for the benefit of both the parties. The court also observed that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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