Exhibition Gold Rs. 4.71cr Seized at Railway Station Over Missing Bill book: Calcutta HC backs Action of RPF and Income Tax Authorities [Read Order]

The Calcutta High Court upheld the seizure of gold totaling ₹4.71 crores taken for exhibition by the Income Tax Department and Railway Protection Force (RPF) at the Ranchi Railway Station in November 2022 on grounds of absence of bill book or alternate source for providing cash memos. The seizure of the jewelry was held by the court as valid and complying with the procedures of Income tax Act, 1961.

The seizure, which occurred during the transportation of jewellery for a private exhibition by Dia Gold Jewels Pvt. Ltd., was challenged by the petitioner as arbitrary and unlawful. However, the High Court found that the authorities had reasonable grounds for their actions.

The petitioner is a private limited company engaged in the jewellery trade with showrooms in Kolkata and Mumbai, claiming the seized items were legitimate stock-in-trade being transported for an exhibition in Ranchi. Two employees carrying the jewellery were detained by RPF officials upon arrival at Ranchi Railway Station. Subsequently, the Income Tax Department was alerted and took charge of the matter under Section 131(1A) of the Income Tax Act.

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Despite presenting transfer memos and a company letter, the employees failed to produce essential documents such as a bill book or any billing mechanism for on-site sales. Further discrepancies emerged in the weight of the jewellery — the company claimed it was 4307 grams, while actual seizure revealed 5441 grams. These factors raised suspicion about the legitimacy and documentation of the goods.

While the petitioner alleged procedural lapses, including non-service of the search warrant and discrepancies in the valuation report, the authorities contended that multiple opportunities were granted to reconcile the stock with books of accounts. However, the petitioner failed to provide a satisfactory explanation or accurate records to prove that the goods were duly accounted for.

The respondents also pointed out that the company did not have a GST registration in Jharkhand as a Casual or Non-Resident Taxable Person, further weakening the claim that the exhibition was lawful and tax-compliant. The authorities defeated their action as legally justified, by citing the Supreme Court’s ruling in CIT v. Laljibhai Kanjibhai Mandalia.

Justice Rajarshi Bharadwaj observed that the respondents acted within the scope of their statutory authority under Sections 131 and 132 of the Income Tax Act. It noted that credible information was received from RPF officials, and that the seizure was neither arbitrary nor a misuse of power. The lack of critical documents, along with weight discrepancies and delayed submission of stock reconciliation data, validated the seizure as a legitimate exercise of investigative powers.

The High Court also reiterated the principle that legitimate business transactions must be supported by complete and accurate documentation, particularly when goods of high value are in transit.

To Read the full text of the Order CLICK HERE

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