Court grants return of seized jewellery in writ petition due to lack of tax arrears and incomplete assessment.

The court allowed the writ petition, granting the petitioner's entitlement to the return of the seized jewellery based on the absence of current tax arrears and incomplete assessment for the relevant year. The respondent was directed to return the jewellery within a specified timeframe, highlighting the inapplicability of Section 132B in the absence of tax liability and completed assessment for the relevant year.

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Issues:
Mandamus to release seized jewellery, Application of Section 132B for retaining assets, Entitlement of petitioner for the return of jewellery.

Analysis:
The petitioner filed a writ petition seeking a Mandamus to direct the respondent to release the jewellery seized during an Income Tax Act search operation. The petitioner's assets, including gold, diamond jewellery, and ornaments, were seized on a specific date, and assessments were conducted subsequently. Appeals filed by the petitioner led to the assessments being set aside and restored for re-adjudication. The Revenue withdrew appeals citing low tax effect, resulting in dismissal. The petitioner requested the return of jewels multiple times, but the respondent delayed citing pending assessments for certain years.

The respondent argued that despite no current tax arrears from the petitioner, assets were being retained under Section 132B due to pending assessment for a specific year. The court examined Section 132B, which applies when an existing liability is determined post-assessment under Section 153A. As the assessment for the relevant year was incomplete, the court found the Revenue unjustified in relying on Section 132B to retain assets when no tax arrears were due from the petitioner at present. Consequently, the court ruled in favor of the petitioner, directing the respondent to return the seized jewellery within four weeks from the date of the order, emphasizing the lack of tax liability and incomplete assessment for the relevant year as key factors in the decision.

In conclusion, the court allowed the writ petition, granting the petitioner's entitlement to the return of the seized jewellery based on the absence of current tax arrears and incomplete assessment for the relevant year. The respondent was directed to return the jewellery within a specified timeframe, highlighting the inapplicability of Section 132B in the absence of tax liability and completed assessment for the relevant year.

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