Gujarat High Court
Ashish Jayantilal Sanghavi (Prop. Of ... vs Income Tax Officer on 12 April, 2022
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/10667/2020 ORDER DATED: 12/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10667 of 2020
==========================================================
ASHISH JAYANTILAL SANGHAVI (PROP. OF M/S. VIR IMPEX)
Versus
INCOME TAX OFFICER
==========================================================
Appearance:
MR TUSHAR HEMANI, SENIOR COUNSEL WITH MS VAIBHAVI K
PARIKH(3238) for the Petitioner(s) No. 1
MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 12/04/2022
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs:
"(a) direct the respondent to release the diamonds in question;
(b) Pending admission, hearing and final disposal of this petition, direct the respondent to release the diamonds 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."
2 The facts giving rise to this writ application may be summarized as under:
3 The writ applicant is engaged in the business of diamonds. The business is being carried out in the name of a proprietary concern Page 1 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 namely "M/s. Vir Impex". It is the case of the writ applicant that he sold polished diamonds valued at Rs.92,09,550/- to one company by name "Akash Diamonds Pvt. Ltd." vide the invoice No.112/19/20 dated 2 nd July 2019.
4 On 8th August 2019, a search action under Section 132 of the Act was carried out by the department at the business premises of the "Akash Diamonds Pvt. Ltd." It appears that during the search, one of the employees of the writ applicant namely Parin N. Sheth was present and was found to be in possession of polished diamonds of the value referred to above. According to the writ applicant, his employee Parin N. Sheth had visited the premises of the Akash Diamonds Pvt. Ltd. in order to collect the signed invoice No.112/19-20 dated 2 nd July 2019 referred to above. The said invoice was also found during the course of the search.
5 The diamonds referred to above were seized from the possession of Parin N. Sheth.
6 For the first time, on 6 th September 2019, the writ applicant made a request in writing to release the seized asset (diamonds) in accordance with the provisions of Section 132(1)(i) of the Income Tax, 1961 [for short, "the Act"]. The application preferred by the writ applicant dated 6th September 2019 reads thus:
"6th September 2019 From Shri Ashish Sanghvi Surat.
PAN : ACVPS5819E
To,
Income Tax Officer,
Ward - 1(2)(1),
Page 2 of 14
Downloaded on : Sat Apr 16 20:44:20 IST 2022
C/SCA/10667/2020 ORDER DATED: 12/04/2022
Surat.
Sub : Request to release the diamonds as per proviso S. 132B(1)(i).
Ref: The search proceedings u/s. 132 conducted against my employees Shri Parin N. Sheth on 08.08.2019.
Dear Sir,
1. The search was conducted at the premises of Akash Diamonds Pvt Ltd at 35 Burtolla Street, Ground Floor, Kolkata-700007 on 08.08. 2019. My employee Shri Parin N. Sheth was present at the time of the search and he was found to be in the possession of polished diamonds which were subsequently valued at Rs.92,09,550/-. He visited this premises for the purpose of collecting the signed sale bill raised by my proprietory firm M/s. Vir Impex on account of goods sold to this party vide Invoice No. 112/19-20 dated 02.07.2019. The invoice was given to this party for the purpose of signature. The invoice was also found in the course of the search
2. That my employee was found to be in the possession of polished diamonds. Although he was found in possession of polished diamond of Rs. 92,09,550/-, the ownership of the goods belongs to M/s. Vir Impex in which I am the proprietor.
3. My employee Shin Parin N. Sheth retracted his declaration made at the time of the search for the value of the alleged polished diamonds. However, the same was disclosed in my hand. The diamonds were valued at Rs.92,09,550/- but after deducting the gross profit of about 5% the cost price of the diamonds comes to Rs.87,50,000/-. Without prejudice to the accounting of the said diamonds in the books of accounts of my propriatory firm Ms. Vir Impex, I am ready to surrender the income of Rs. 87,50,000-as my additional income for AY 2019-20 & AY 2020-21. I undertake to pay tax alongwith interest on declaration of Rs. 87,50,000/-.
4. Your honour is requested to release the diamonds to the as the said diamonds belongs to my proprietory firm Ms. Vir Impex. It is to be noted that although the diamonds were held by my employer as stock in trade on behalf of my firm the diamonds were seized in the course of search Accordingly, it is very urgent to release the diamonds for the purpose of the smooth running of the trade and to avoid any liquidity crunch.
5. Although I am liable to pay advance tax before 15.03.2020, I am ready to pay tax on disclosed income instantly against the release of the diamonds."Page 3 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022
C/SCA/10667/2020 ORDER DATED: 12/04/2022
7 A second reminder for the release of the diamonds is dated 16 th
September 2019 (Annexure : C).
8 One affidavit was also filed by Parin N. Sheth stating as under:
"16th September 2019
To,
Income Tax Officer,
Ward - 1(2)(1),
Surat.
Reg : Shri Ashish Sanghvi, Surat
PAN : ACVPS5819E
Sub : Request to release the diamonds as per proviso to S. 132B91)(i).
Ref: The search proceedings u/s. 132 conducted against assessee's employee Shri Parin N. Sheth on 08.08.2019.
Dear Sir,
1. The search was conducted at the premises of Akash Diamonds Pvt. Ltd. at 35 Burtolla Street, Ground Floor, Kolkata-700007 on 08.08.2019 Assessee's employee Shri Parin N. Sheth was present at the time of the search and he was found to be in the possession of polished diamonds which were subsequently valued at Rs.92,09,550/-. He visited this premises for the purpose of collecting the signed sale bill raised by assessee's proprietary firm M/s. Vir Impex on account of goods sold to this party vide Invoice No. 112/19-20 dated 02.07.2019. The invoice was given to this party for the purpose of signature. The invoice was also found in the course of the search.
2. Assessee's employee was found to be in the possession of polished diamonds. Although he was found in possession of polished diamond of Rs.92,09,550/-, the ownership of the goods belongs to M/s. Vir Impex in which assessee is the proprietor.
3. Assessee's employee Shri Parin N. Sheth retracted his declaration made at the time of the search for the value of the alleged polished diamonds as the diamonds seized belongs to assessee. The photocopy of the affidavit of Shri Parin N. Sheth is enclosed herewith. Assessee has also executed the affidavit claiming the ownership of the diamonds. The Page 4 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 affidavit in original is enclosed herewith.
4. Your honour is requested to release the diamonds to assessee as the said diamonds belongs to assessee's proprietary firm M/s. Vir Impex. It is to be noted that although the diamonds were held by assessee's employee as stock in trade on behalf of assessee's firm, the diamonds were seized in the course of search Accordingly, it is very urgent to release the diamonds for the purpose of the smooth running of the trade and to avoid any liquidity crunch.
5. Assesseee has already requested your honour to release the diamonds vide letter dated 06.09.2019.
6. In view of the above, your honour is requested to release the diamonds either to assessoe or to his employee Shri Parin N. Sheth who was holding the diamonds on behalf of assessee."
9 One affidavit was also filed by the writ applicant himself. The same reads thus:
"AFFIDAVIT I, Shri Ashish Sanghvi, aged about 40 years, Hindu by caste, resident of 505, Chandanvan Apartment, Majura Gate, Surat PAN - ACVPS5819E do hereby take oath and state on solemn affirmation as under:
1. That the search was conducted at the premises of Akash Diamonds Pvt. Ltd at 35 Burtola Street, Ground Floor, Kolkata-700007 on 08.08.2019 My employee Shri Parin N Sheth was present at the time.
the search and he was found to be in the possession of polished diamonds which were subsequently valued at Rs 92.00.550F He visited this premises for the purpose of collecting the signed sale bill raised by my propriatory firm Mis. Vir Impex on account of goods sold to this party vide Invoice No. 112/19-20 dated 02.07.2019 The invoice was given to this party for the purpose of signature. The invoice was also found in the course of the search.
2. That my employee was found to be in the possession of polished diamonds Although he was found in possession of polished diamond of Rs. 92,09,550/-, the ownership of the goods belongs to M/s. Vir Impex in which I am the propriator.
3. That I am assessed to tax at ITO Vard-1(2)(1), Surat having PAN-ACVPS5819E. My employee Shri Parin N. Sheth is assessed to tax at ITO, Ward-(1)(2)(4), Surat vide PAN EEMPS3331Q.
Page 5 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022C/SCA/10667/2020 ORDER DATED: 12/04/2022
4. That the diamonds were valued at Rs.92,09,550/- but after deducting the gross profit of about 5% the cost price of the diamonds comes to Rs.57,50,000/-. Without prejudice to the accounting of the said diamonds in the books of accounts of my proprietory firm M/s. Vir Impex, I am ready to surrender the income of Rs 87.50 000 as my additional income for AY 2019-20 & AY 2020-21. I undertake to pay tax alongwith interest on declaration of Rs. 87,50,000/-.
The above scaled facts and us and correct to the best of my knowledge and belief and know that to make a false affidavit is a criminal offence."
10 A third reminder for the release of the diamonds was given on 6 th March 2020 (Annexure : F).
11 The employee of the writ applicant also sent a reminder dated 6 th September 2019 to release the diamonds. The employee once again on 17th September 2019 made a request to release the diamonds. The last communication between the employee of the writ applicant and the Income Tax Officer is dated 6th March 2020.
12 At no point of time, the Income Tax Officer thought fit to give any reply to all the aforesaid letters / applications filed under Section 132B(1)(i) of the Act.
13 In such circumstances referred to above, the writ applicant had to come before this Court with the present writ application.
14 Mr. Tushar Hemani, the learned Senior Counsel appearing for the writ applicant invited the attention of this Court to Section 132B of the Act. The relevant part of Section 132B with which we are concerned reads thus:
"[Application of seized or requisitioned assets:
132B. (1) The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely:--Page 6 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022
C/SCA/10667/2020 ORDER DATED: 12/04/2022
(i) the amount of any existing liability under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of the liability determined on completion of the 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 on completion of the assessment under Chapter XIV-B for the block period, as the case may be] (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is [deemed to be in default, or the amount of liability arising on an application made before the Settlement Commission under sub section (1) of section 245C, may be recovered out of such assets]:
[Provided 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 asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, to the person from whose custody the assets were seized:
Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed;"
15 Mr. Hemani concentrated more on the second proviso to Section 132B of the Act referred to above. As per the first proviso of clause (i) of sub-section (1) of Section 132B of the Act, where an application for release of the asset is made within thirty days from the end of the month in which the asset was seized and the nature as well as source of acquisition of such asset is explained, it is permissible to recover the amount of "existing liability" out of such asset and the remaining portion of such asset could be released with the prior approval of the competent authority.
Page 7 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022C/SCA/10667/2020 ORDER DATED: 12/04/2022 16 As per the second proviso of clause (i) of sub-section (1) of
Section 132B of the Act, the asset referred to in the first proviso shall be released within one hundred and twenty days from the date on which the last of the authorisations for search under Section 132 for requisition under Section 132A was executed.
17 Mr. Hemani would like to raise manifold contentions, but according to him, he should succeed on the submission that the statutory time limit of 120 days expired on 6 th December 2019 i.e. 120 days from the date of the last of the authorisations for search i.e. 8th August 2019.
18 According to Mr. Hemani, the issue raised above is squarely covered by a decision of this High Court in the case of Nadim Dilipbhai Panjvani vs. Income Tax Officer, Ward No.3 reported in (2016) 383 ITR 375 (Gujarat).
19 In such circumstances referred to above, Mr. Hemani prays that there being merit in his writ application, the same may be allowed and the seized asset (diamonds) may be ordered to be released in favour of the writ applicant.
20 Per contra, this writ application has been vehemently opposed by Ms. Kalpana K. Raval, the learned Senior Standing Counsel appearing for the Revenue. According to Ms. Raval, the asset was seized from one Parin Nareshkumar Sheth and not from the writ applicant. Parin N. Sheth in his statement recorded under Section 132(4) of the Act categorically accepted that the diamonds belong to him. As Parin N. Sheth was not able to submit any documentary evidence during the course of the search or during the post search inquiry, the diamonds are now to be treated as income of Parin N. Sheth and the assessment Page 8 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 proceedings in respect of Parin N. Sheth are pending as on date.
21 Ms. Raval also invited the attention of this Court to few relevant averments made in affidavit-in-reply filed on behalf of the respondents.
22 In such circumstances referred to above, Ms. Raval prays that there being no merit in the present writ application, the same may be rejected.
ANALYSIS: 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 Page 9 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 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):
"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 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 Page 10 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 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 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 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 Page 11 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 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 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 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 Page 12 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022 C/SCA/10667/2020 ORDER DATED: 12/04/2022 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 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 13 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022C/SCA/10667/2020 ORDER DATED: 12/04/2022
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.
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 service is permitted.
(J. B. PARDIWALA, J) (NISHA M. THAKORE,J) CHANDRESH Page 14 of 14 Downloaded on : Sat Apr 16 20:44:20 IST 2022