INCOME TAX ACT, 1961

Article 226 Section 132B

Writ - Ownership of seized gold - Gold seized from job-workers of assessee jeweller -

Petitioner was a partnership firm engaged in the business of trading in gold jewellery in Tiruchirappalli, Tamil Nadu. In the usual course of business, petitioner obtains metal gold loans from Banks and gets the same converted into gold jewellery through job-workers for onward sale to end customers either in India or abroad. Such gold forms part of Petitioner's inventory after which the required quantity of gold was issued to job-workers under vouchers for jewellery making. After it was made, the job worker returns the jewellery to the Petitioner who then sells it to its end customers. Respondent No. 5 was the Job Worker for the Petitioner from whom the gold was seized. However, it was submitted that no prayers were sought against him. It was the Petitioner's case that it obtained 5 kgs. of gold from Bank of Nova Scotia and 2kgs. from State Bank of India pursuant to documentation with the respective banks after which it had issued the said 7 kgs. of gold to Respondent No. 5 for further job work processing under two separate vouchers. Respondent No. 5 was apprehended on 28-11-2016 at Mumbai Airport with 8 kgs. of gold, 7 kgs. of which, it was submitted, belongs to the Petitioner as also confirmed by Respondent No. 5. The said gold was seized by the income tax officials. Statements of Respondent No. 5 were recorded. It was submitted that the said 7 kgs. of gold belonged to the Petitioner and 1(one) kg. was for the stock-in-trade of Respondent No.5 for his business purpose. Petitioner made application for release of the seized gold to Pr. CIT on 4-10-2017. However, since the Principal Commissioner had failed to decide the said application dated 4-10-2017 for release of 7 kgs. of seized gold even after 23 months, Petitioner filed Writ Petition No. 1202 of 2019 before the Court seeking similar reliefs as in this petition. Held: There was a dispute on the factual aspects of the matter regarding ownership of the seized gold, the varying versions of the parties pertaining to the vouchers on the basis of which respondent No.5 was carrying the gold bullion when he was apprehended, examination of evidence, regarding source of the 8kg bullion, the genuineness of the transaction, etc. The Court also observed from paragraph 5.3 of the impugned order as also confirmed by Counsel for Respondent No.5 that the said respondent had filed appeal against the assessment order and that the said appeal was pending before the CIT(A), Mumbai. Copy of the memo of the said appeal in Form 35 dated 11-1-2019 had also been placed before this Court. This court declined to exercise writ jurisdiction under article 226 of the Constitution of India due to pendency of the appeal before the CIT(A). However, in the interest of justice and considering that the seized gold had been lying with the income-tax authorities since 28-11-2016, CIT(A), Mumbai was directed to decide the appeal filed by the Respondent No.5 expeditiously and at any rate not later than three months from the date of receipt of a copy of this order.

REFERRED :

FAVOUR : Matter remanded.

A.Y. :

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