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2005 DIGILAW 775 (GAU)

Harihar Shah v. Commissioner of Income Tax

2005-11-10

RANJAN GOGOI

body2005
JUDGMENT Ranjan Gogoi, J. 1. Heard Mr. G.N. Sahewalla, learned Counsel for the petitioner, and Mr. U Bhuyan, learned standing counsel, Income Tax Department. 2. The facts, in brief, may be noted at the outset : On the strength of a warrant of authorisation dated November 17, 1999, issued under the provisions of Section 132 of the Income Tax Act, a search and seizure operation was conducted in the premises of one Dolphine Service, a courier agency doing business within the city of Guwahati. In the course of the aforesaid search and seizure operation held on November 24, 1999, evidence of two fixed deposit certificates issued by the then ANZ Grindlays Bank for Rs. 20,000 and Rs. 25,000, respectively, renewed up to date, were found. The said fixed deposits certificates were issued in the name of the petitioner, who had shown his address in the care of one Subodh Misra of M/s. Dolphine Service. On the basis of the said facts a consequential warrant of authorisation under Section 132(1A) was issued for search and the premises of the bank and thereafter on January 20, 2000, the respondents converted the value of the certificates into a bankers cheque payable to the Department whereafter the money was deposited in the account of the Commissioner, in accordance with the provisions of Rule 112 of the Income Tax Rules. Aggrieved by the said action the instant writ petition has been filed seeking appropriate intervention of the court. 3. The argument raised on behalf of the contesting parties having centred around the correct procedure to be adopted by the officers of the Department under the provisions contained in Section132 of the Act, it would be necessary for this Court, even though it may be briefly, to notice what is enjoined by the aforesaid Section 132 of the Act. 4. Under Section 132(1) of the Act, a warrant authorising a search may be issued subject to the satisfaction of the officer issuing the warrant as required under the aforesaid Sub-section (1) of Section 132 of the Act. This would enable a search and consequent seizure of the offending items of income so as to bring the same within the purview of the Act. This would enable a search and consequent seizure of the offending items of income so as to bring the same within the purview of the Act. If in the course of such search operation property including jewellery or even books of account are discovered to have a reasonable proximity with the object of the search but such property is located in another premises, a consequential search warrant can be issued authorising a search of the other premises where such property may be located. Under Sub-section (3), the officer conducting the search may not effect any seizure but may require the owner of the property or the person in control of the same not to deal with the property in question except with the previous permission of the authorised officer. Thereafter, the remaining provisions of Section 132 of the Act have to be followed for the purpose of deciding as to the manner in which the property seized is to be dealt with or whether such property is to be returned to the owner. 5. In the present case, Mr. Bhuyan, learned Counsel for the Department, has placed before the court the satisfaction note recorded by the authorised officer leading to the consequential warrant authorising the search in the premises of the bank following which conversion of the property of the petitioner took place. A reading of the aforesaid satisfaction note would go to show that the authorised officer has recorded his satisfaction to the effect that the fixed deposit certificates of the petitioner represent the property of the account holder, i.e., the petitioner and not the property of Dolphine Service, the courier agency, whose premises were authorised to be searched in terms of the initial warrant of authorisation issued. There is no satisfaction recorded by the authorised officer to the effect that the amount covered by the fixed deposit certificates is in any way relatable to Dolphine Service in respect of whom satisfaction as regards suppression of concealment of income had led to the initiation of search on the strength of the original warrant dated November 17, 1999. In the absence of such satisfaction, the consequential warrant authorising the search of the premises of the ANZ Grindlays Bank cannot be held by the court to be authorised under the provisions of Section 132 of the Income Tax Act. In the absence of such satisfaction, the consequential warrant authorising the search of the premises of the ANZ Grindlays Bank cannot be held by the court to be authorised under the provisions of Section 132 of the Income Tax Act. Consequently, this Court will have little option but to hold that the action of the respondents in converting the property of the petitioner in the form of the fixed deposit certificates and the further action of the respondents in obtaining a banker's cheque for the amount covered by the two certificates and the consequential deposit of the amount of the banker's cheque into the account of the Commissioner are unauthorised actions with which the court must interfere. 6. In view of the discussion that has preceded, the findings recorded and the conclusion arrived at, the writ petition has to be allowed, which I hereby do. The respondent authority in the Income Tax Department is to forthwith return to the petitioner the amount converted by them on the strength of the consequential warrant of authorisation. As the aforesaid conversion and deposit into the Commissioner's account took place in the year 2000, the court directs the refund of the amount by the Income Tax Department to the petitioner to be accompanied by interest at 11 per cent, which the court understands to be the rate of interest on fixed deposits prevailing in the year 2000 for the period of 5 years for which money was illegally retained. The computation of interest will commence from the date of conversion. The return of the money along with interest in terms of the present order will be made by the respondents within 30 days from the date of receipt of the certified copy of this order. 7. The writ petition is accordingly allowed in terms of the directions as above.