- (1.) THIS writ petition has been filed against the impugned order dated October 18, 1993 (annexure "D" to this writ petition), and for a mandamus directing the respondents to release the entire seized assets and money of the petitioner and to refund various amounts.
(2.) WE have heard Sri Rakesh Kumar Agarwal, learned counsel for the petitioner, and Sri Shekhar Srivastava, learned counsel for the Department. The petitioner is a Hindu undivided family of which Sri Ramendra Kumar Agarwal is a karta. The petitioner is carrying on the business of silver bullion, etc. On August 10/11, 1988, the officials of the Income-tax Department raided the business and factory premises of the petitioner and they seized Rs. 1,82,150 in cash and seized gold ornaments and silver goods worth Rs. 16,79,252 N. S. Cs. and F. Ds. of the face value of Rs. 50,040 and companies shares and other books of account as alleged in paragraph 3 of the writ petition. Thereafter it appears that proceedings under Section 132(5) of the Income-tax Act, 1961, were held. However, the regular assessment of the petitioner for the assessment year 1989-90 was completed and an assessment order dated March 30, 1992, was passed which is annexure-'2' to this writ petition. Against the said order dated March 30, 1992, the petitioner had filed an appeal before the Commissioner of Income-tax (Appeals) who allowed the appeal and deleted the addition of Rs. 2,303 and Rs. 4,23,517. He further allowed the claims of Rs. 6,250 and Rs. 993, which the Assessing Officer had omitted to allow. True copy of the Commissioner of Income-tax (Appeals) order is annexed as annexure-'3' to this writ petition. Thereafter we are informed that the Department has filed a second appeal before the Income-tax Tribunal, which is pending, but there is nothing on record to show that any stay order has been passed by the Tribunal. The petitioner is aggrieved against the impugned order dated October 19, 1993, directing him to furnish a bank guarantee of Rs. 20 lakhs for the release of the seized goods worth Rs. 17,29,292. We are of the opinion, that the impugned order is vitiated in law because once regular assessment has been completed, the proceedings under Section 132(5) of the Income-tax Act automatically lapse, as the proceeding under Section 132(5) of the Income-tax Act are summary proceedings subject to the regular assessment. Since the regular assessment has been completed, there is no justification on the part of the Department to demand bank guarantee of Rs. 20 lakhs. Of course the Department can realise income-tax dues against the petitioner having recourse to Schedule II of the Income-tax Act, but it is not justified in demanding bank guarantee of Rs. 20 lakhs.
(3.) HENCE the assessment order is arbitrary, illegal and is hereby set aside. The writ petition is allowed. The petitioner's goods will be released.;