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KALPESH LAXMINARAYAN THAKKAR Versus DEPUTY COMMISSIONER OF INCOME TAX AND 1

2016 (5) TMI 401 - GUJARAT HIGH COURT

Release of seized ornaments - Recovery of the outstanding dues - Held that:- The seized ornaments have been got valued through the Government approved valuer and it is not the case of the Department that the valuation made by the approved valuer at the instance of the Department is not proper. The ornaments have been lying with the Department since 1996, however, till date, no steps have been taken to auction them to recover the outstanding dues, which lends support to the submission advanced by .....

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st the tax liability and also provides for release of ornaments subject to payment of the price as per the valuation of the assets, it would be in the interest of the revenue to retain the amount and release the ornaments, inasmuch as, at least to that extent, the dues of the petitioner would stand recovered. Otherwise, the ornaments would keep lying in distraint with the Department without getting any revenue therefrom. Thus, though the above referred steps have been taken by the respondents on .....

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titioner is not duly cooperating with the revenue authorities in recovery of the outstanding dues. It is hoped and expected that the petitioner will extend full cooperation to the Department in this regard. - SPECIAL CIVIL APPLICATION NO.6822 of 2016 - Dated:- 5-5-2016 - MS. HARSHA DEVANI AND MR. G.R.UDHWANI, JJ. FOR THE PETITIONER : MR JP SHAH, ADVOCATE with MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, SR. STANDING COUNSEL ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE HARSHA .....

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ornaments of the petitioner. 3.1 On 1st August, 1996, the petitioner who is an income-tax assessee, came to be searched under section 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) and gold ornaments came to be seized by the raiding party from the petitioner. Thereafter, the petitioner, by a letter dated 10th March, 2014, addressed to the Commissioner of Income Tax-3, Ahmedabad stated that during the course of search proceedings on 1st August, 1996, gold ornaments as per a .....

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transferred wherein it was stated thus:- You had made request for release of seized gold jewellery against the same you have agreed to pay the equivalent amount of seized gold jewellery. As per Govt. Approved Valuer s report dated 22/12/2015 the present value of the seized jewellery is ₹ 22,40,101/-. The copy of the valuation report of the registered valuer is enclosed herewith. Therefore, you are requested to pay the above amount on or before 31/12/2015, so that your seized gold jeweller .....

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and requested the first respondent to issue a challan so that the petitioner could make arrangement of funds. The office of the first respondent handed down a duly filled in challan to the petitioner on 9th February, 2016, whereupon the petitioner paid ₹ 22,40,101/- to the Income Tax Department by depositing such amount in ICICI Bank Limited on 10th February, 2016. It is further the case of the petitioner that by way of abundant caution, before making payment, he addressed a letter dated 1 .....

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the first respondent. 3.2 On 10th February, 2016, after making the payment as stated above, the petitioner addressed a letter to the first respondent informing him that he had deposited ₹ 22,40,101/- on 10th February, 2016 in the ICICI Bank being equivalent value of the seized gold jewellery and enclosed the original challan of payment with the letter and requested the first respondent to release the said gold ornaments as promised by him in letter dated 23rd December, 2015. The first resp .....

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ited an amount of ₹ 22,40,101/- for release of the seized gold jewellery. It was submitted that it is not possible to comprehend as to why the Department is not prepared to honour the written word given by one of its officers who is a Deputy Commissioner of Income Tax in consultation with the Commissioner, despite the fact that the petitioner has already paid the moneys in accordance with the promise. It was further submitted that some time in the past, the Departmental officers had though .....

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ng paid the amount in terms of the valuation made by the approved valuer, has now adopted a stand that it was under a mistake that the petitioner was called upon to pay such amount for return of the seized ornaments. The attention of the court was invited to the circular dated 21st January, 2009 issued by the Central Board of Direct Taxes regarding release of seized assets other than cash. Referring to clause (e) of para 3 of the said circular, it was submitted that it is the policy of the Board .....

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dated 9th September, 2014 of the Income Tax Officer conveying the decision of the Commissioner of Income Tax, Ahmedabad-3 to the Additional Commissioner of Income Tax, Range-7 to point out that what was approved by the Commissioner was that the assessee should pay the outstanding dues first after which release can be considered. It was submitted that on account of some misunderstanding on the part of the Additional Commissioner, he, under communication dated 12th September, 2014, had informed th .....

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facts reveal that pursuant to the application dated 10th March, 2014 made by the petitioner for return of the seized ornaments, the Commissioner of Income Tax, Ahmedabad-III conveyed that: i. Assessee can be informed that he has to pay outstanding dues first, then release can be considered Ii The value of jewellery should be ascertained afresh by a Government approved valuer at the time of release. However, such instructions were misconstrued by the Additional Commissioner of Income Tax, Range-7 .....

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r, 2015, the Deputy Commissioner informed the petitioner to pay such amount on or before 31st December, 2015 so that his seized jewellery could be released. Since such letter was received on 31st December, 2015, the petitioner sought some more time to pay such amount till 20th January, 2016 and ultimately, deposited such amount on 10th February, 2016. However, thereafter, there is no response from the respondents and the seized ornaments have still not been released. The stand of the respondents .....

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cision of the Commissioner of Income Tax-III. Nonetheless, the position as on date is that pursuant to a representation made by the respondents, albeit on a misunderstanding, the seized ornaments have been valued by the Department and the petitioner has deposited an equivalent amount with the respondents. Since the petitioner has deposited the amount of ₹ 20,40,101/- pursuant to a promise made by the Department to release such ornaments, if the respondents are not in a position to return t .....

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larly, to clause 3(e) thereof which reads thus:- (e) The Board is also aware of the fact that some assessees have great attachment to the seized assets and are willing to exchange such seized assets for an equivalent amount of cash. The replacement of the seized assets with cash also makes it easier for the Department to adjust this cash against the tax liability. Hence, it has been decided that the seized assets can also be released at any time, with the approval of the Commissioner of Income-t .....

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the amount may be deposited in the PD account and may be used for adjustment against tax liability in accordance with the provisions of section 132B of the Act. Such amount should be deposited in the P.D. account and dealt in the manner laid out in Board Instruction No.11 of 2006. 9. In the context of such instructions, it may be noted that the petitioner has duly made an application to the Commissioner for release of the ornaments. Pursuant thereto, the seized ornaments have been got valued thr .....

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