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TMI Blog2023 (3) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... f the writ of this order. - R/SPECIAL CIVIL APPLICATION NO. 850 of 2023 - - - Dated:- 17-1-2023 - HONOURABLE MS. JUSTICE SONIA GOKANI AND HONOURABLE MR. JUSTICE SANDEEP N. BHATT For the Petitioner(s) No. 1 : Mr Fenil H Mehta (11663) For the Respondent(s) No. 1,2,3,4,5 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. The petitioner by way of present petition under Articles 226 of the Constitution of India prays to direct the respondent No.2 to release the seized gold ornaments weighing 3230.550 grams (including beads weighing 30.280 gms) of the petitioner. The petitioner also challenges the unresponsiveness of the respondent Nos. 1 and 2 to the application of the petitioner made under Section 132B of the Act to release the seized gold ornaments on the ground that this is illegal action on the part of the respondent. 2. The petitioner is an individual and a sole proprietor of the firm namely Madhuram Ornaments at Rajkot. It is engaged in the manufacturing and trading of the gold and silver jewellery. 2.1 The petitioner was travelling from Rajkot to Varanasi for carrying out his business activities. He was carrying stock-in-trade of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the learned Sr. Standing Counsel Mrs.Kalpana Raval assisted by Mr. Karan Sanghani, learned advocate waives service of notice and the matter is taken up for hearing at the stage of admission. 8. We have noticed the decisions which are the forming part of the record at Annexure E and F . Pendency of this application before the respondent No.2 was impermissible the statutory provision of Section 132(B) of the Income Tax Act. 9. The person concerned needs to make an application to the Assessing Officer within 30 days from the end of month in which the assests was seized and the release is contemplated within period of 120 days from the date on which the last of the authorization of search is made under Section 132 or acquisition under Section 132(A) was executed as case may be. This Court in case of Nadim Dilip Bhai Panjvani Vs. Income Tax Officer, Ward No.3 [2016] 66 taxmann.com 124(Gujarat)] dealt with the matter where, release of seized cash was requested by way of an application in April 2014 and assessing officer decided the application in July, 2015 over one year later, could not be countenanced by the following findings and observations :- 6. As per Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment for the year relevant to the previous year, in which, the search was initiated or a requisition is made or for the block period referred to under Chapter XIV-B. 8. Further proviso to Clause (i) of sub section (1) of Section 132B of the Act provides that such asset or any portion thereof, as is referred to in the first proviso shall be released within a period of 120 days from the date on which the last of the authorizations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed. This further proviso, therefore, has to be viewed and interpreted in the background of the provisions contained in Clause (i) of sub section (1) of Section 132B of the Act and the first provisio to the said clause. The further proviso, thus, requires that such assets or portion thereof referred to in the first provisio would be released within the prescribed time. Of course when this further proviso refers to any portion of the asset, as is referred to in the first proviso, it necessarily permits the Assessing Officer to apply the assets against the existing liability or even when not satisfied about the source of acquisition of the asset to refuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section- 132 or recognized under Section-132A of the Act. A detailed procedure is prescribed under Section-132B(1)(i) of the Act. Out of such seized assets, the amount of the existing liability or the amount of the liability determined on the completion of the regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment is required to be recovered. The first proviso of this Section enables the assessee to make an application within 30 days from the end of the month in which the asset was seized. For release of the assets the assessee is required to explain the nature and source of acquisition of such assets to the satisfaction of the Assessing Officer. On such satisfaction and with prior approval of the Chief Commissioner the Assessing Officer is empowered to release the asset to the person from whose custody the assets were seized. The second proviso to this Section makes it clear that the assets are required to be released within a period of 120 days from the date on which the last of the authorization for search under Section-132 or for requisition under Section- 132A, as the case may be, was execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d approval of the Commissioner was held to be illegal and unlawful. The ratio of the said decision would squarely cover the present case and in all these cases the respondent authorities have retained the seized assets beyond the period of 120 days. The orders passed by the respondent authorities beyond such period are of no consequence and they are not tenable at law. 20. In the above view of the matter, all these orders which are challenged in the present group of petitions retaining the assets beyond the period of 120 days are hereby quashed and set aside and the respondent authorities are directed to release the gold ornaments and jewellary seized by them during the course of search and seizure operation forthwith and in any case not latter than two weeks from the date of receipt of the writ of this Court or from that date of receipt of certified copy of this order, whichever is earlier. 10. We may also refer to the decision of Division Bench of this Court in case of Cowasjee Nusserwanji Dinshaw vs. Income Tax Officer reported in 165 ITR page 702, in which, the Court found that the books and documents of the assessee, which were seized during search and seizure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the materials on record, the only question that falls for our consideration is whether we should direct the respondents to hand over the diamonds to the writ applicant. 24 The statutory provision of Section 132B of the Act is very clear. There appears to be a mandate and such mandate is mandatory and not directory. This is evident from the ratio of the decision of this High Court in the case of Nadim Dilipbhai Panjvani (supra) wherein this Court has taken the view that the Courts should attach considerable importance to the time frame provided under Sections 132A and 132B reply of the Act when it comes to a question of retention of books of accounts or of seized assets. It is not permissible for the Court to read the time limit provided in the proviso to clause (i) of sub-section (1) of Section 132B of the Act as being merely directory. Any attempt on the part of the Court to read it as directory would substantially dilute the rigors of the statutory provisions and would give an unbridled power to the Assessing Officer to retain the seized assets awaiting the finalization of future possible liability for indefinite period without deciding the application of the person concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer and satisfying him about the source of the acquisition of the asset, the same would be released after adjustment towards existing liabilities, without waiting for the outcome of the assessment proceedings under Section 153A of the Act or the assessment for the year relevant to the previous year, in which, the search was initiated or a requisition is made or for the block period referred to under Chapter XIV-B. 8. Further proviso to Clause (i) of sub section (1) of Section 132B of the Act provides that such asset or any portion thereof, as is referred to in the first proviso shall be released within a period of 120 days from the date on which the last of the authorizations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed. This further proviso, therefore, has to be viewed and interpreted in the background of the provisions contained in Clause (i) of sub section (1) of Section 132B of the Act and the first provisio to the said clause. The further proviso, thus, requires that such assets or portion thereof referred to in the first provisio would be released within the prescribed time. Of course when this further proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication for release of jewellary and gold ornaments is not tenable at law and hence the same deserves to be quashed and set aside. The provisions contained in Section- 132B(1) are very clear and unambiguous. Section- 132B deals with the assets seized under Section- 132 or recognized under Section-132A of the Act. A detailed procedure is prescribed under Section- 132B(1)(i) of the Act. Out of such seized assets, the amount of the existing liability or the amount of the liability determined on the completion of the regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment is required to be recovered. The first proviso of this Section enables the assessee to make an application within 30 days from the end of the month in which the asset was seized. For release of the assets the assessee is required to explain the nature and source of acquisition of such assets to the satisfaction of the Assessing Officer. On such satisfaction and with prior approval of the Chief Commissioner the Assessing Officer is empowered to release the asset to the person from whose custody the assets were seized. The second provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, this Court has already taken the view in Cowasjee Nusserwanji Dinshaw (Supra) wherein the books of accounts were retained beyond the period of 180 days from the date of seizure without communicating the reasons recorded by the authorised officer and approval of the Commissioner was held to be illegal and unlawful. The ratio of the said decision would squarely cover the present case and in all these cases the respondent authorities have retained the seized assets beyond the period of 120 days. The orders passed by the respondent authorities beyond such period are of no consequence and they are not tenable at law. 20. In the above view of the matter, all these orders which are challenged in the present group of petitions retaining the assets beyond the period of 120 days are hereby quashed and set aside and the respondent authorities are directed to release the gold ornaments and jewellary seized by them during the course of search and seizure operation forthwith and in any case not latter than two weeks from the date of receipt of the writ of this Court or from that date of receipt of certified copy of this order, whichever is earlier. 10. We may also refer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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