AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1521
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....ous gold ornaments, which was seized initially by the Railway Police (i.e. Respondent No. 4 and his team) on 10.12.2024, and thereafter, requisitioned by Respondent No. 1 vide panchnama dated 18.12.2024 (hereinafter referred to as the 'seized jewellery'). 4. At the outset, it is pertinent to mention that this is the second round of litigation. Initially, the Petitioners herein, had filed a writ petition before this Court being WP (L) No. 8071 of 2025. The same was disposed of vide order dated 17.06.2025 whereby this Court directed that the application of the Petitioners for release of jewellery be disposed of by Respondent No. 5 within 6 weeks from the date of the said order. 5. Pursuant thereto, Respondent No. 5 has passed an order dated 29.07.2025, whereby he has rejected the application of the Petitioners for release of the seized jewellery for the reasons stated therein. The said order has been interalia, challenged in the present petition. 6. The facts as brought out in the Writ Petition are as under: a. It is the Petitioners' case that as a matter of regular practice, the partners of Petitioner No. 1 carry their stock-in-trade from their office to various pl....
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....rs that in the meantime, Respondent No. 4 had informed Respondent No. 1 about the interception of the gold jewellery from Petitioner No. 2. Between 11.12.2024 to 18.12.2024, Respondent No. 1 had issued summons to Petitioner No. 2 and the statements of Petitioner No. 2 were recorded by Respondent No. 1. g. On 13.12.2024, Respondent No. 1 issued summons to Petitioner No. 2 requiring the Petitioner to be present on 14.12.2024 at Camp office - Room No. 102, Scindia House to give evidence and / or to produce books of accounts and other documents. On 14.12.2024, Petitioner No. 2 along with Mr. Sandeep Shah appeared before Respondent No. 1. It is the Petitioners' case that they had provided a copy of all the vouchers and invoices and explained the issue in detail. It was submitted that the seized jewellery was the stock-intrade of Petitioner No. 1 and that it was duly disclosed in the books of accounts. It was also impressed upon Respondent No. 1 that the same constituted about 60% of the total stock-in-trade of Petitioner No. 1 and seizure of such stock-in-trade for about 3 days has severely hampered the business of Petitioner No. 1. Accordingly, request was made for releasing t....
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....-in-trade found in the course of search could not be seized. Thus, it was requested that as the seized ornaments represented the stock-in-trade of Petitioner No. 1, and the same was duly supported by documentary evidence filed, a request was made to release the seized jewellery so as to carry on the business and to support the family of the partners of Petitioner No. 1. It was also submitted that the Petitioners were willing to submit any further documents, if required. l. Despite the above request, and despite providing all documentary evidence in support of the case, Respondent No. 1 did not release the seized jewellery. Instead another a summons was issued by Respondent No. 1 dated 27.01.2025 to Petitioner No. 2 to appear before her on 03.02.2025 at 11:30 am for recording of his statement under Section 131. Accordingly, on 04.02.2025, another statement of Petitioner No. 2 was recorded. m. Petitioner No. 2, inspite of not being furnished a copy of the statements recorded, and without knowing the contents thereof, affirmed an affidavit on 15.02.2025. In the said affidavit, Petitioner No.2 categorically stated on oath, after bringing out all the facts, that the se....
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....no loss to a jeweller if instead of two rings one chain is sold having equivalent weight. As to the issue of one-to-one mapping, it was submitted that there is no such requirement under the Income-tax Act or under any other law that the inventory record should be maintained in a particular format. It was submitted that, since, the value of weight as recorded in the stock register of Petitioner No. 1 reconciles with the jewellery as seized by the RPF, it was clear that the said stock was the accounted stock of Petitioner No. 1. It was therefore, requested that the seized jewellery should be released. 10. Vide a letter dated 17th July 2025 filed on 18th July 2025, another detailed submission was made coupled with a request for release of the jewellery. 11. On 29.07.2025, Respondent No. 5 passed the impugned order, rejecting the request for release of seized jewellery. The primary reason to reject the request of the Petitioners is the alleged lacuna in the stock register produced, inasmuch as the same only reflects the gross weight, and which according to him, lacks essential descriptive particulars of the goods in stock such as number of pieces, type of items, etc. It is also s....
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.... an entry on 10.12.2024 in the name of Petitioner No. 2 for taking the seized jewellery of 4370.280 grams (net weight). He submitted that this very jewellery of the exact same weight was seized on the same day. This, he submitted, demonstrates that the seized jewellery belonged to Petitioner No. 1. He also brought to our notice similar entries against the name of Petitioner No. 2 and another partner which reflects that they have taken the goods out on an approval basis on day one coupled with a return of a similar quantity a couple of days later, at page 242 of the paper-book as illustrative of this practice. He further placed reliance upon the provisions of Section 132A of the IT Act which deals with requisition of books of accounts and assets. He argued that sub-section (3) of Section 132A refers to and provides for application of the provisions related to search procedure as enacted in Section 132. Then, he referred to the provisions of Section 132(1) of the IT Act, which empowers the tax department to carry out a search if, inter alia, there is any reason to believe that a person is in possession of any bullion, jewellery or other valuable article etc. which represents incom....
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....nd is the stock-in-trade and, therefore, should be released forthwith. 13. Per contra, Ms. Nagaraj, the learned counsel appearing for Respondent No. 1 to Respondent No. 3, relied upon the instruction of the Board bearing number F. No. 299/06/2023-Dir(Inv-III) dated 16.10.2023, which provided for the steps for release of seized assets. She relied upon paragraph 5 to submit that the Petitioners can get the goods released by providing a bank guarantee of the market value of the assets. She then relied upon a judgment of this Court in case of M. N. Navale (Bigger HUF) vs. Somnath M. Wajale, Deputy Commissioner of Income-tax, Central Circle - 2(2), Pune reported in (2017) 57 taxmann.com 5 (Bombay), and the order dated 04.09.2019, in case of Echjay Industries Pvt. Ltd. and Ors vs. Mr. Rajendra and Ors in Notice of Motion No. 481 of 2016 wherein, under similar circumstances, this Court had directed release of jewellery on furnishing of a bank guarantee. She submitted that to safeguard the interest of Revenue, similar conditions may be imposed in the present case. 14. Mr. Ranganayakulu, learned Counsel for Respondent No. 5, referring to the affidavit in reply filed by Respondent No. ....
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....ery belongs to Petitioner No. 1 and that it constitutes its stock-in-trade. We say so because, first of all, the Petitioners have produced voluminous records before the authorities below including the purchase invoices to show purchase of bullion, purchase register which records all such invoices, karigar receipts/ vouchers to demonstrate making of gold ornaments from the bullion purchased, stock register of bullion which shows movement of bullion, sales invoices to show sale of ornaments and the stock register of finished goods, which records movement of finished goods. These records/ documents are from 01.04.2024 till the date of seizure. None of the above records have been disputed. There is not a whisper in the impugned order that such records are false or concocted. In fact, in the course of hearing as well, to our specific query as to any dispute regarding the correctness of the record, none of the Counsels for the Respondents have disputed the same. Therefore, there is no reason to disbelieve the voluminous records produced by the Petitioners. Secondly, and more importantly, the very same quantity of gold i.e., 4370.280 grams (net weight) which is recorded in the stock regis....
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.... item wise, still such stock would have to be maintained in terms of weight only. Therefore, we do not find this ground to be a valid ground to reject the application of the Petitioners. 18. In light of the above discussion, we are not inclined to accept the contention of Ms. Nagaraj that the goods may be released subject to Petitioners securing the Department with a bank guarantee. If the goods cannot be seized at all, but are still seized, then, it does not stand to logic that such goods can be released only on furnishing of some security. It is not disputed by the Department that stock-in-trade cannot be seized in terms of the proviso to Section 132(1)(iii) of the Act and that the Department is consistently making its position, in this regard, clear, as can be seen from the Press Release dated 12.11.2020 (supra). Therefore, if goods are wrongly seized, then, such goods cannot be retained by the Department, and it cannot insist on providing security for release of the goods. Moreover, we are prima facie satisfied that the Petitioners have discharged the onus to prove the nature and source of the seized assets and therefore, such seized jewellery has to be released without insi....