Gujarat High Court
Yogeshbhai Chandrakant Pala vs Income Tax Officer, Ward 2(1)(1), ... on 17 January, 2023
Author: Sonia Gokani
Bench: Sonia Gokani
NEUTRAL CITATION
C/SCA/850/2023 ORDER DATED: 17/01/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 850 of 2023
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YOGESHBHAI CHANDRAKANT PALA
Versus
INCOME TAX OFFICER, WARD 2(1)(1), RAJKOT
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Appearance:
MR FENIL H MEHTA(11663) for the Petitioner(s) No. 1
for the Respondent(s) No. 1,2,3,4,5
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CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 17/01/2023
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 Page 1 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 gold ornaments weighing 3230.550 grams.
2.2 He was intercepted by respondent No.4 at Lalbahadur Shshtri Airport, Varansi and his gold ornaments were seized.
3. The petitioner filed an application on 26 th October, 2020 before the respondent Nos. 4 and 5 seeking to release the said seized gold ornaments on the ground that the same is stock in trade and therefore, they cannot seized the gold ornaments and can only be inventoried.
4. The respondent No.5 had asked petitioner to make application before jurisdictional assessing officer citing provisions of Section 132B of the Act on 11.12.2020.
5. On 17.02.2021, the petitioner therefore, filed the writ petition before the Allahabad High Court challenging the legality and Page 2 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined validity of the search and seizure operation conducted in case of petitioner and also sought for release of the said gold ornaments in view of the proviso to Section 132(1)(iii) of the Act. Allahabad High Court after hearing the matter on 23.2.2021, permitted the petitioner to move a proper application before the Assessing Authority at Rajkot under Section 132B of the Income Tax Act.
6. The petitioner therefore, made an application under Section 132B(1)(i) of the Act to the respondent No.1 on 10.3.2021 requesting to release said seized gold ornaments in view of the liberty granted by the Allahad High Court. However, no reply to the said application was received till date. The petitioner is therefore aggrieved by the said non action on the part of the respondent No. 1 the last communication dated 10th March, 2021 making a request to release the said seized gold ornaments. The prayers sought for by the petitioner are as follows:-
"(a) direct the respondent No.2 to release the seized gold ornaments weighing 3230.550 grams (including beads weighing 30.280 gms. ) of the petitioner.
(b) Pending admission, hearing and final disposal of this
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NEUTRAL CITATION
C/SCA/850/2023 ORDER DATED: 17/01/2023
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petition, direct the respondent No.2 to release the said seized gold ornaments in question.
(c) any other and further relief deemed just and proper be granted in the interest of justice;
(d) To provide for the cost of this petition.
7. We have heard Mr. Fenil Mehta, learned advocate for the petitioner. Noticing the fact that this Court by settled position of law had already decided the very issue in relation to Section 132B of the Income Tax Act. We deemed it appropriate to request 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 Page 4 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 1 of Section 132B of the Act, thus, the assets seized under Section 132 or requisitioned under Section 132A has to be dealt with in the manner provided in Clauses (i) to (iii) thereof. Principally, under Clause (i), it is provided that the amount of any existing liability under the Income Tax Act or the related fiscal statutes and the liability determined on completion of assessment under Section 153A and the assessment of the year relevant to the previous year, in which, search is initiated or requisition is made, or the amount of liability determined including the penalty and interest would be recovered out of such assets. Provisio to Clause (i) of Section 1 of Section 132B, however, provides that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month, in which, the asset was seized, for release of the asset and the Page 5 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined nature and source of acquisition of any such assets is explained to the satisfaction of the Assessing Officer, the amount of existing liability referred to in the said clause may be recovered out of such asset and the remaining portion, if any, may be released to the person from whose custody the asset was seized, with the prior approval of the officer prescribed under the said proviso.
7. Under Clause (i) of sub-section (1) of Section 132B, any seized assets would be adjusted towards the recoveries not only against existing but also liabilities which may crystallize on completion of the assessment under Section 153A and the assessment of the relevant year to the previous year, in which, the search is initiated or the request is made or in the block assessment proceedings. Such liabilities would not only include the principal tax but also interest and penalties, if any. However, under the first proviso to Clause (i) of sub section (1), if the person concerned makes an application within the prescribed time and also satisfies the Assessing Officer about the source of acquisition of such asset, the asset would be adjustable only against the existing liabilities. In other words, upon the concerned person applying to the Assessing 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 Page 6 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 to release the same till the further liabilities which may arise upon completion of the assessment under Section 153A of the Act or the assessment of the year relevant to the previous year, in which, the asset was seized etc. are completed. To this extent, we fully accept the stand of the counsel for the revenue that the further proviso would have to be read in continuation of the first proviso and therefore would not override the provision of the first proviso which requires the Assessing Officer to release the asset only upon being satisfied with the source of its acquisition. However, this further proviso puts a time limit, within which, such asset must be released. The question of not releasing the asset would arise only upon the decision on an application that may have been made by the person concerned is taken by the Assessing Officer. If no decision is taken, necessarily, the option of the Assessing Officer to adjust such seized asset would be confined to the existing liabilities. It is, in this context, in our opinion, the legislature required the Assessing Officer to follow the time limit Page 7 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined scrupulously. In other words if the person concerned has made an application for release of the asset within the prescribed time, the authority can refuse such request on the ground of not being satisfied about the source of its acquisition. But if no such decision is taken within the time envisaged in the further proviso, releasing of the asset becomes imminent.
9. Somewhat similar question arose before this Court in case of Mitaben R. Shah vs. Deputy Commissioner of Income tax and anr (supra), in which also, the application for release of the seized assets and books of accounts was decided after expiry of 120 days from the last of the authorizations. Division Bench of this Court held and observed as under:
"18. Having heard the learned advocates appearing for the parties and having considered their rival submissions in light of the statutory provisions and facts and circumstances of the case, the Court is of the view that the impugned order passed by the respondent rejecting the petitioner's application 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 Page 8 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 executed.
19. Considering the above provisions, the petitioner made an application within the permissible time limit. Despite the fact that the period of 120 days was over, the assets were not released. The petitioner thereafter sent reminder and still no action was taken on behalf of the respondent. The petitioner, therefore, approached this Court by way of writ petition. During the pendency of this petition, the petitioner's application was rejected and since the order was passed by the respondent giving fresh cause of action the earlier petition was allowed to be withdrawn with a liberty to file fresh petition. The action of the respondent authorities is highly objectionable in view of the fact that in earlier petition, after issuance of notice time was sought for to file the reply affidavit. However, this time was utilized for the purpose of passing the order so as to make the earlier petition as infructuous one. In the affidavit-in-reply the respondents have come out with the stand that a detailed note was prepared by the Assistant Director of Investigation whereby Page 9 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined the the petitioner's claim for release of the gold ornaments and jewellary was rejected. However, the said note was never communicated to the petitioner. The petitioner is not concerned with the stand taken by the respondent in the affidavit-in-reply. With regard to the change of jurisdiction one has to see the compliance of the provisions of Section-132B(1) (i) of the Act. The first thing is to make an application in time explaining the nature and source of acquisition of the asset which was duly made by the petitioner. No dispute was raised during the permissible time of 120 days. It is only after the expiry of the said period the order was passed raising all sorts of contentions. However, this is not permissible in view of the mandate contained in second proviso to Section-132B(1)(i) of the Act. It clearly says that the assets or any portion thereof shall have to be released within a period of 120 days. Once this period is over the respondents have no authority to retain these assets. Interpreting somewhat similar provisions, 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 Page 10 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 operation, were retained beyond a period of 180 days without communicating the reasons recorded by the Assessing Officer for such purpose. The Court held that, continued retention of the books and accounts and seized documents would, therefore, be illegal and invalid. It was observed as under:
"In the present case, the account books/documents were seized in November/December,1984. Admittedly, after the expiry of the period of 180 days, the documents have been retained by the revenue authorities without communicating the reasons stated by the authorized officer and the approval of the Commissioner. To date, no such intimation has been given to the assessee and, therefore, in view of the ratio of the above decision, there can be no doubt that the extended retention of the account books/documents is wholly illegal and unlawful. We are, therefore, of the opinion that the grievance made by the assessee is well founded."Page 11 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023
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11. It can thus be seen that the Courts attach considerable importance to the time frame provided under Sections 132A and 132B of the Act when it comes to a question of retention of books of accounts or of seized assets. We cannot read the time limit provided in further proviso to Clause (i) of sub section (1) of Section 132B of the Act as being merely directory. Any such view would substantially water down the rigors of the statutory provisions and would give an unlimited authority to the Assessing Officer to retain the seized assets awaiting finalization of future possible liability for indefinite period without deciding the application of the person concerned who may be perfectly legitimately in a position to explain the source of the asset so seized.
10. Following the very decisions in case of Ashish Jayantilal Sanghavi Vs. Income Tax Officer {[2022] 444 ITR 457}, this court decided the very issue where, the Assessee -Company had filed various applications for release of diamonds seized during the search conducted upon the company under Section 132B of the I.T.Act. However, the revenue retained the assests even after the expiry of 120 days from date of last authorization for search, such seized diamonds were released to the assessee, according to the Court in view of provision of Section 132B wherein, the Court has observed as under :-
Page 12 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined "23 Having heard the learned counsel appearing for the parties and having gone through 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 resply 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 concerned who may be legitimately in a position to explain the source of the asset so seized.
25 In the aforesaid context, we may quote few relevant observations from the judgement in the case of Nadim Dilipbhai Panjvani (supra):Page 13 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023
NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined "6. As per Section 1 of Section 132B of the Act, thus, the assets seized under Section 132 or requisitioned under Section 132A has to be dealt with in the manner provided in Clauses (i) to (iii) thereof. Principally, under Clause (i), it is provided that the amount of any existing liability under the Income Tax Act or the related fiscal statutes and the liability determined on completion of assessment under Section 153A and the assessment of the year relevant to the previous year, in which, search is initiated or requisition is made, or the amount of liability determined including the penalty and interest would be recovered out of such assets. Provisio to Clause (i) of Section 1 of Section 132B, however, provides that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month, in which, the asset was seized, for release of the asset and the nature and source of acquisition of any such assets is explained to the satisfaction of the Assessing Officer, the amount of existing liability referred to in the said clause may be recovered out of such asset and the remaining portion, if any, may be released to the person from whose custody the asset was seized, with the prior approval of the officer prescribed under the said proviso.
7. Under Clause (i) of sub-section (1) of Section 132B, any seized assets would be adjusted towards the recoveries not only against existing but also liabilities which may crystallize on completion of the Page 14 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined assessment under Section 153A and the assessment of the relevant year to the previous year, in which, the search is initiated or the request is made or in the block assessment proceedings. Such liabilities would not only include the principal tax but also interest and penalties, if any. However, under the first proviso to Clause (i) of sub section (1), if the person concerned makes an application within the prescribed time and also satisfies the Assessing Officer about the source of acquisition of such asset, the asset would be adjustable only against the existing liabilities. In other words, upon the concerned person applying to the Assessing 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 Page 15 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 to release the same till the further liabilities which may arise upon completion of the assessment under Section 153A of the Act or the assessment of the year relevant to the previous year, in which, the asset was seized etc. are completed. To this extent, we fully accept the stand of the counsel for the revenue that the further proviso would have to be read in continuation of the first proviso and therefore would not override the provision of the first proviso which requires the Assessing Officer to release the asset only upon being satisfied with the source of its acquisition. However, this further proviso puts a time limit, within which, such asset must be released. The question of not releasing the asset would arise only upon the decision on an application that may have been made by the person concerned is taken by the Assessing Officer. If no decision is taken, necessarily, the option of the Assessing Officer to adjust such seized asset would be confined to the existing Page 16 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined liabilities. It is, in this context, in our opinion, the legislature required the Assessing Officer to follow the time limit scrupulously. In other words if the person concerned has made an application for release of the asset within the prescribed time, the authority can refuse such request on the ground of not being satisfied about the source of its acquisition. But if no such decision is taken within the time envisaged in the further proviso, releasing of the asset becomes imminent.
9. Somewhat similar question arose before this Court in case of Mitaben R. Shah vs. Deputy Commissioner of Income tax and anr (supra), in which also, the application for release of the seized assets and books of accounts was decided after expiry of 120 days from the last of the authorizations. Division Bench of this Court held and observed as under:
"18. Having heard the learned advocates appearing for the parties and having considered their rival submissions in light of the statutory provisions and facts and circumstances of the case, the Court is of the view that the impugned order passed by the respondent rejecting the petitioner's application 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 Page 17 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 executed.
19. Considering the above provisions, the petitioner made an application within the permissible time limit. Despite the fact that the period of 120 days was over, the assets were not released. The petitioner thereafter sent reminder and still no action was taken on behalf of the respondent. The petitioner, therefore, Page 18 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined approached this Court by way of writ petition. During the pendency of this petition, the petitioner's application was rejected and since the order was passed by the respondent giving fresh cause of action the earlier petition was allowed to be withdrawn with a liberty to file fresh petition.The action of the respondent authorities is highly objectionable in view of the fact that in earlier petition, after issuance of notice time was sought for to file the reply affidavit. However, this time was utilized for the purpose of passing the order so as to make the earlier petition as infructuous one. In the affidavit-in-reply the respondents have come out with the stand that a detailed note was prepared by the Assistant Director of Investigation whereby the the petitioner's claim for release of the gold ornaments and jewellary was rejected. However, the said note was never communicated to the petitioner. The petitioner is not concerned with the stand taken by the respondent in the affidavit-in-reply. With regard to the change of jurisdiction one has to see the compliance of the provisions of Section-132B(1) (i) of the Act. The first thing is to make an application in time explaining the nature and source of acquisition of the asset which was duly made by the petitioner. No dispute was raised during the permissible time of 120 days. It is only after the expiry of the said period the order was passed raising all sorts of contentions. However, this is not permissible in view of the mandate contained in second proviso to Section-132B(1)(i) of the Act. It Page 19 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined clearly says that the assets or any portion thereof shall have to be released within a period of 120 days. Once this period is over the respondents have no authority to retain these assets. Interpreting somewhat similar provisions, 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 the decision of Division Bench of this Court in case of Cowasjee Nusserwanji Page 20 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined 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 operation, were retained beyond a period of 180 days without communicating the reasons recorded by the Assessing Officer for such purpose. The Court held that, continued retention of the books and accounts and seized documents would, therefore, be illegal and invalid. It was observed as under: "In the present case, the account books/documents were seized in November/December,1984. Admittedly, after the expiry of the period of 180 days, the documents have been retained by the revenue authorities without communicating the reasons stated by the authorized officer and the approval of the Commissioner. To date, no such intimation has been given to the assessee and, therefore, in view of the ratio of the above decision, there can be no doubt that the extended retention of the account books/documents is wholly illegal and unlawful. We are, therefore, of the opinion that the grievance made by the assessee is well founded."
11. It can thus be seen that the Courts attach considerable importance to the time frame provided under Sections 132A and 132B of the Act when it comes to a question of retention of books of accounts or of seized assets. We cannot read the time limit provided in further proviso to Clause (i) of sub Page 21 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined section (1) of Section 132B of the Act as being merely directory. Any such view would substantially water down the rigors of the statutory provisions and would give an unlimited authority to the Assessing Officer to retain the seized assets awaiting finalization of future possible liability for indefinite period without deciding the application of the person concerned who may be perfectly legitimately in a position to explain the source of the asset so seized.
12. Facts, noted above, are rather glaring. The application of the petitioner for the purpose of releasing of the seized asset, which was made on 17.04.2014, came to be decided only on 20.07.2015 i.e. over one year later. In the meantime, the petitioner had sent two reminders. Action of the Assessing Officer cannot be countenanced. Impugned order dated 20.07.2015 is set aside. The seized cash shall be released in favour of the petitioner alongwith interest as per the statute.
13. With this direction, the petition is disposed of."
26 In view of the aforesaid, this writ application succeeds and is hereby allowed. The respondents are directed to hand over the seized asset (diamonds) to the writ applicant within a period of four weeks from the date of receipt of the writ of this order. It is needless to clarify that the assessment proceedings, if initiated against Parin N. Sheth with respect to the seized asset or even in the case of the writ applicant himself, may continue in accordance with law. Direct Page 22 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023 NEUTRAL CITATION C/SCA/850/2023 ORDER DATED: 17/01/2023 undefined service is permitted.
11. Let the officer concerned decide his application within period of two weeks from the date of receipt of this order without fail With the above directions, petition stands disposed of accordingly.
(SONIA GOKANI, J) (SANDEEP N. BHATT,J) BEENA SHAH Page 23 of 23 Downloaded on : Sun Sep 17 20:54:21 IST 2023