1973 (11) TMI 25 - HC - Income Tax

Court allows amendments under Category III, reserves decision on dismissal application, addresses search/seizure legality in final judgment.

The court allowed amendments under Category III but disallowed those under Categories I and II. It reserved the decision on the respondents' application ... Civil Procedure, Search And Seizure, Writ Petition Issues Involved:1. Amendment of writ petitions under Order 6, Rule 17, CPC.2. Dismissal of writ petitions as infructuous under Section 151, CPC.3. Legality of search and seizure under Section 132 of the Income-tax Act and Rule 112 of the Income-tax Rules.4. Propriety of summary assessment under Section 132(5) of the Income-tax Act.5. Return of seized goods.6. Issuance of writ of prohibition.Detailed Analysis:Issue 1: Amendment of Writ Petitions under Order 6, Rule 17, CPCThe petitioners sought amendments to their writ petitions, categorized into three types:Category I: Additional Inconsistent Facts- The petitioners aimed to introduce new facts and grounds, alleging a conspiracy between the Commissioner of Income-tax and the officers involved in the search and seizure.- The court ruled that these amendments would introduce a 'totally new and inconsistent case,' altering the fundamental character of the original writ petitions. Citing precedents, the court emphasized that amendments should not change the real question in controversy or the foundation of the original claim.- Therefore, amendments under Category I were disallowed.Category II: Post-Writ Facts and Corresponding Reliefs- The petitioners sought to amend their petitions to include facts and reliefs related to a summary assessment order passed after the filing of the original writ petitions.- The court held that such amendments would introduce a new cause of action, which is not permissible in writ jurisdiction. It noted that amendments should not substitute the original cause of action with a new one.- Consequently, amendments under Category II were disallowed.Category III: Additional Grounds Supporting the Writ- These amendments were purely legal grounds and did not introduce any new facts or inconsistencies.- The court found these amendments necessary for a just decision and allowed them.Issue 2: Dismissal of Writ Petitions as Infructuous under Section 151, CPC- The respondents argued that the writ petitions had become infructuous following the passing of the summary assessment order under Section 132(5) of the Income-tax Act and the petitioners' pursuit of statutory remedies under Section 132(11).- The court decided not to address this issue at this stage, noting that the respondents had not yet filed their replies to the writ petitions. It emphasized that it would be inappropriate to decide the matter piecemeal and reserved this issue for final decision after considering the overall facts and circumstances.Issue 3: Legality of Search and Seizure under Section 132 of the Income-tax Act and Rule 112 of the Income-tax Rules- The petitioners contended that the search and seizure were conducted without proper authorization under Rule 112 and Section 132, rendering the actions illegal.- The respondents countered by presenting certified copies of the authorization warrants and panchnamas, which the petitioners acknowledged by their signatures.- This issue remains to be decided upon the final hearing, considering the evidence and arguments presented by both parties.Issue 4: Propriety of Summary Assessment under Section 132(5) of the Income-tax Act- The petitioners expressed apprehension that the Income-tax Officer would treat all seized property as undisclosed income and make a summary assessment adversely affecting them.- The court noted that this concern would be addressed during the final hearing, contingent on the legality of the initial search and seizure.Issue 5: Return of Seized Goods- The petitioners requested the return of goods seized on August 1, 1972, arguing that the seizure was unauthorized.- The court deferred this decision, pending the resolution of the legality of the search and seizure.Issue 6: Issuance of Writ of Prohibition- The petitioners sought a writ of prohibition to restrain further proceedings or assessments under Section 132(5).- The court's decision on this request will depend on the final determination of the legality of the search, seizure, and subsequent actions by the Income-tax Department.ConclusionThe court allowed amendments under Category III but disallowed those under Categories I and II. It reserved the decision on the respondents' application to dismiss the writ petitions as infructuous for the final hearing. The legality of the search and seizure, summary assessment, and return of seized goods will be addressed in the final judgment. The respondents were directed to file their replies within one month.