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TMI Blog1981 (9) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia promulgated the Voluntary Disclosure of Income and Wealth Ordinance, 1975 and the Ordinance was subsequently repealed by the Voluntary Disclosure of Income and Wealth Act (Act No. 8 of 1976). The first respondent filed voluntary returns as per S. 14(1) and 15 of the Act and paid the tax in respect of the income declared and also informed the Assistant Collector of Central Excise, Pondicherry, and forwarded to him extracts of the entry in form G.S. 10, regarding the gold and gold ornaments owned and possessed by her and declared under Act 8 of 1976. The first respondent then requested the Deputy Director of Inspection, Income-tax, to release the gold and gold jewellery seized from her premises. As the Collector of Central Excise (appellant herein) refused to give concurrence for the release the first respondent filed a writ petition before this court. Opposing the release of the gold jewellery it was contended on behalf of the Collector of Central Excise that- 1. The first respondent has not made a full and proper disclosure of the gold and gold jewellery seized from her and she has not made a declaration as contemplated under S. 16 (1) of the Act. 2. At the time the first r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Gold Control Act. On these findings the learned Judge allowed the writ petition. Hence the present writ appeal. 3. On or after the enactment of the Voluntary Disclosure of Income and Wealth Act, 1975 (hereinafter to be referred to as Act 8 of 1976), any person can make a declaration of income which he has failed or omitted to disclose before the commencement of the Act and enjoy immunity from the provisions of the Income-tax Act, on payment of tax on the disclosed income at the special rates specified in the Schedule to the Act (vide S. 3 of the Act). Where money, bullion, jewellery or other valuable article belonging to a person were seized as a result of search under the Income-tax Act or the Wealth-tax Act, such a person can also make a declaration of both income and wealth and after payment of tax chargeable in respect of the income and wealth, he enjoys immunity from penalty, prosecution etc., under the Income-tax Act and Wealth-tax Act. The person can also claim immunity from penalty, prosecution under the Gold Control Act if before making the declaration- 1. the gold or bullion was not seized as a result of the search made under the Gold Control Act; and 2. no proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the gold from the police authorities proceeded to take action under S. 167 of the Sea Customs Act. The question arose whether there was seizure by the Customs authorities within the meaning of S. 178-A of the Sea Customs Act. The Supreme Court pointed out that the expression 'seized' in the context in which it is used means 'take possession of, contrary to the wishes of the owner of the property'. On the same analogy the seizure contemplated under the Gold Control Act must be both actual and physical and not fictional or symbolic or deemed seizure. Secondly, the seizure must be in accordance with the provisions relating to the seizure under the Gold Control Act and by the officers empowered to effect the seizure. Any Gold Control officer authorised in this behalf has reason to suspect that any provision of the Gold Control Act has been or is being or is about to be contravened, he may search and seize the gold along with the package, covering or receptacle, if any, in which the gold is found. This power of search and seizure is provided under Ss. 58, 59 and 66 of the Gold Control Act. In the instant case, there is nothing to show that the Gold Control officer had reason to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In 'Words and Phrases' Permanent edition, Vol. 34, a number of American decisions are referred to for ascertaining the meaning of the word 'proceeding'. It is said that the term 'proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which a judicial action is invoked. In the decision reported in Ramanathan Chettiar in reg. 1942-1-ML J 111 the court while interpreting the word 'proceeding' in the Stamp Act, held - "The words 'suit or proceeding' have been interpreted in various senses in different statutes according to the intent and scope of the statute, some times, in a narrow sense and some times in a wide sense... In its narrow sense it (proceeding) is a step in any action or in an independent proceeding analogous to an action by which a litigation is initiated." In Ganga Nicken v. Sundram Iyer, 1956-1-MLJ 63 at 65, the Court held - "A 'proceeding' may in some enactment mean an action or that which initiates an action and in other enactments it may also mean a step in an action...the words 'any proceeding' in S. 89 of the Judicature Act, 1873, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Collector of Central Excise, Pondicherry, addressed a letter to the Assistant Director of Income-tax with a copy to the Range Officer, Central Excise, Chidambaram, to record a statement from R. Balasubramaniam son of late R. Rathinasami Chettiar. But, in pursuance of the letter no statement was recorded by the Range Officer, Chidambaram, from R. Balasubramaniam. Even before the receipt of the letter, Balasubramaniam had already sent a statement to the Assistant Collector of Central Excise, Pondicherry. The Range Officer merely procured a copy of the statement and sent the same to the Assistant Collector of Central Excise, Pondicherry. Thus it can be seen that even before the Range Officer went to record the statement, Balasubramanian of his own volition, has sent a statement by post to the Assistant Collector of Central Excise, Pondicherry. Such a voluntary statement cannot be construed as, taking a prescribed course of action or taking the requisite step against the licensed dealer for contravention of the provisions of the Gold Control Act. Moreover, the declaration under Act 8 of 1976 was made by the first respondent. By no stretch of imagination can it be said that a proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of a licenced dealer. Rule 15 of the Gold Control (Forms, Fees and Miscellaneous matters) Rules, 1968, provides that the return in the case of licensed dealer must be in form No. GS 17. Rule 11 provides that the account of gold referred to in S. 55 of the Gold Control Act shall be kept by the licensed dealer in form Nos. GS 11 and GS 12. In the instant case, the first respondent's son Balasubrarmanian wrote a letter to the Assistant Collector of Central Excise, Pondicherry, enclosing a return in form No. GS 17, for the quarter ending 31-12-1975. On receipt of the above letter, the Assistant Collector of Central Excise, Pondicherry, acknowledged the same and directed Balasubramaniam to make the necessary entries as 'receipt' in the dealer's account. The Central Excise officer has verified the entries in the books and affixed his signature, in token thereof. Thus from. the records produced it is seen that under the directions from the Assistant Collector of Central Excise, the Range Officer, Chidambaram, verified the entries made in the ledger by Balasubramaniam on 16-5-1976 and initiated the form No. GS 10 book. The entry in GS 10 included the gold jewellery declared by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that they have not excluded the weight of stones and lacquer contents in the gold ornaments. This accounts for the discrepancy in the weight of gold as determined by the Income-tax department and the Central Excise department. From this discrepancy in weight, the arguments so strenuously built up that the declaration made under the Gold Control Act was in respect of a larger quantity of gold than what was disclosed under Act 8 of 1976 and hence no immunity can be claimed in respect of the excess quantity of gold, has to be rejected. 10. The learned Counsel for the appellant lastly contended that the declaration in forms GS 10 and 17 was made by Balasubramaniam, while the writ petition for the return of the seized gold and ornaments was made by his mother, the first respondent herein, and the writ petition is not maintainable. Such a plea has not been taken in the counter or in the grounds of appeal filed before this court. That apart, the contention raised also lacks substance. As already stated, the first respondent's husband Rathinasami Chettiar was carrying on business in gold and gold jewellery at Chidambaram. After his death, the business was carried on by his wife (the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id arrears of tax by selling the gold after it is released to her and in view of this undertaking the order may be clarified that the first respondent will be entitled to get a release of the gold only after paying all the subsisting tax arrears. 14. The learned Counsel for first respondent stated that the second respondent is entitled to retain custody of such jewels as are sufficient to satisfy the aggregate of the amounts referred to in sub-clauses (ii), (iia) and (iii) of S. 132(5) of the Income-tax Act, 1961, and in this view the order passed by this court does not require any clarification. 15. It is not disputed that the representative of the first respondent has undertaken to pay the assessed tax both under the Income-tax Act as well as the Wealth-tax Act for the assessment year 1972-73 to 1978-79. Modes of recovering the assessed tax have been provided under Ss. 222 and 226 of the Income-tax Act, 1961. It is, therefore, open to the second respondent to recover the arrears of tax in the manner provided under the Act. However, in view of the undertaking given by the first respondent that she will pay all the arrears of tax by selling the gold after it is released to her, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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