Court orders return of seized silver ornaments, authorities must comply within four weeks

The court partially allowed the petition, directing the respondent authorities to return the seized silver ornaments to the petitioner within four weeks, emphasizing that the authorities no longer had the authorization to retain the ornaments under section 132A of the Income Tax Act, 1961.

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Issues:
Seizure of property without authorization under section 132A of the Income Tax Act, 1961, validity of impugned orders passed by Additional Sessions Judge and JMFC, authority to retain seized ornaments, relief sought by the petitioner.

Analysis:
The petitioner, engaged in the jewelry business, purchased silver ornaments through bills and tax payments. The authorized person was searched by Railway Police while carrying purchased silver ornaments, leading to the seizure of 219.841 kg silver ornaments worth Rs. 48,79,923. The Income Tax Department claimed the seized ornaments for investigation under the Income Tax Act, 1961, after being informed by Railway Police. The petitioner sought relief to quash the seizure and impugned orders, emphasizing the lack of authorization under section 132A.

The petitioner's counsel highlighted that the assessment for the relevant year did not include any addition related to the seized ornaments, indicating that the authorities had no basis to retain the ornaments. On the other hand, the respondent's counsel suggested that appropriate orders be passed concerning the assessments for the relevant years. The court noted the seizure of 219.841 kg silver ornaments by the authorities under section 132A but emphasized that the assessment for the subsequent year did not include any addition related to the seizure. Consequently, the court held that the authorities no longer had the authorization to retain the seized ornaments.

Ultimately, the court partially allowed the petition, directing the respondent authorities to return the seized silver ornaments to the petitioner within four weeks, in accordance with the provisions of section 132A of the Income Tax Act, 1961. The rule was made absolute to this extent with no order as to costs.

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