Kalyan Jyoti Sengupta, J. - (1.) This matter was called on for hearing on the last occasion. On the prayer of learned counsel for the Revenue the matter was adjourned for hearing today on the ground of non-availability of the learned Additional Solicitor-General. On that date the hearing could have been concluded but for the adjourment prayed for by learned counsel on the ground as above. Today he prayed for further adjournment. I feel the matter cannot be adjourned because it is a partly heard matter.
(2.) Mr. Poddar concluded his submission on the last occasion. He submitted that there is no lawful reason for withholding 9 per cent. Reserve Bank of India Bonds, 99, valued at Rs. 7.2 crores in total. He submits that under the provisions of the block assessment the aforesaid securities were seized pursuant to seizure followed by preparation of panchanama. Block assessment of the petitioners have been completed. Even regular assessment has also been completed. Even after completion of all these the securities were retained on the plea that there is a deemed dividend which is required to be assessed. The assessing authority completed the block assessment in relation to the said bonds and held the amount covered thereby was undisclosed income of deemed dividend. Being aggrieved by the order of the Assessing Officer, the petitioner filed an appeal and the Commissioner of Income-tax (Appeals) allowed the appeals and set aside the order of the Assessing Officer. He submits drawing my attention to the relevant documents that the appeal has been allowed in fact has been acted upon. In spite of all these the aforesaid bonds have not been released. He submits in reference to the stand taken in the affidavit-in-opposition that the provisions of Section 132B have no manner of application. He contended that the precondition to apply the aforesaid provision is that there must be existing liability under the Wealth-tax Act, the Expenditure-tax Act, the Gift-tax Act and the Interest-tax Act, 1974. There is no existing liability as yet nor there is any determination. In anticipation of determining by the learned Tribunal the security cannot be detained. He submits that the Department has not made any application for stay of operation of the order of the Commissioner of Income-tax (Appeals) so that the securities can be withheld till the determination of the appeal pending before the Tribunal. He further submits that mere pendency of appeal does not operate stay of the order appealed against, as separate application has to be made. The next contention is that the departmental authorities are duty bound to implement the order of the appellate authority or any other authority unless the same is set aside. In support of his contention he has relied on a decision of the Supreme Court reported in Collector of Customs v. Krishna Sales (P.) Ltd.,. Then he refers to the judgments of the learned single judge of this court reported in Nicco Corporation Ltd. v. CIT [2001] 251 ITR 791 in the case of Pankaj Guljarilal Gupta v. Collector of Customs [1995] 75 ELT 47 (Cal) in the case of Agrawal Warehousing and Leasing Ltd. v. CIT [2002] 257 ITR 235, in the case of Hariharnath Agarwal and Sons (HUF) v. CIT. He further submits drawing my attention to the proviso to Section 132B that if the contention of the Department is to be accepted then the proviso will be meaningless and then the goods cannot be released until and unless the matter is decided by all the forums available under the law.
(3.) The Department has kept the appeal before the Tribunal pending and is obtaining adjournment after adjournment and he has produced a document in support of the factum obtaining adjournment. Under such circumstances, he contends that retention and/or detention of the securities are wholly unauthorised and not permitted under the law. Learned counsel for the respondent has drawn my attention to paragraph (i) of the affidavit-in-opposition. He submits that admittedly appeal has been preferred against the order of the Commissioner (Appeals) and such appeal is pending before the Income-tax Appellate Tribunal. According to him, this appeal is the continuation of the original proceedings, namely, the assessment. It is true the Commissioner of Income-tax (Appeals) has reversed the order of the Assessing Officer, but then it has not reached its finality. According to him, the liability is to be determined and it will be crystallised only when the decision of the Tribunal will be passed. He further submits that the effect of appeal in revenue matters stands on a different footing from that of the civil proceedings.;