Rajasthan High Court directs to Release Goods seized by Enforcement Directorate [Read Order]
Rajasthan High Court – Rajasthan HC – High Court – Goods – taxscan
Rajasthan High Court – Rajasthan HC – High Court – Goods – taxscan
The Rajasthan High Court has directed the Enforcement Directorate to release the 3773.52 gm gold bullion seized by them in the course of search forthwith to the petitioners after complying with the requirement provided i.e. making a note of inventory.
Justice Ganesh Ram Meena, presiding as the Single judge, has noted that Section 132B of the 1961 Act compels the responding authorities to make a decision regarding the application or representation submitted by an individual. After due consideration, any asset or portion thereof that has been seized during the search and for which the nature and source of acquisition have been clarified should be released within a period of 120 days. Regrettably, the responding authorities did not adhere to this provision.
The case revolves around M/s Bhagwati Jewellers, a registered firm engaged in the trade of gold bullion. During a search operation conducted by the authorities on 15th and 16th February 2020, the gold bullion in question was seized, along with various other items such as electronic devices, mobile phones, and hard disks.
The petitioners contended that the seized gold bullion constituted their stock in trade and was duly recorded in the firm's accounts, making it exempt from seizure under the law. They further alleged that the raiding party mistreated them during the seizure.
A representation was submitted by the petitioners on 19th February 2020, seeking the release of the seized gold bullion. However, the authorities did not respond or take any action on this representation, leading the petitioners to file a writ petition requesting the release of the gold bullion.
The ED justified the seizure by citing information regarding the purchase of smuggled gold by bullion traders and jewellers through illicit means, such as hawala transactions. The search had also led to the discovery of unaccounted gold bars, cash, unrecorded gold jewellery, foreign currencies, and incriminating documents.
The petitioners submitted that Section 37 of the Foreign Exchange Management Act (FEMA) in conjunction with Sections 132 and 132B of the Income Tax Act, 1961, which prescribe specific timeframes for releasing seized assets if their nature and source of acquisition are explained to the satisfaction of the authorities, however, the same was not followed by the respondents.
The respondents contended that the delay in responding to the representation was due to the COVID-19 pandemic and referred to Supreme Court decisions regarding extensions of limitations in pandemic situations.
However, the High Court noted that while authorities must adhere to the prevailing laws, they had failed to act upon the representation submitted by the petitioners, resulting in a miscarriage of justice. Consequently, the court issued directions to the authorities to release the seized gold bullion and to promptly consider their representation.
The High Court held that “the writ petition deserves to be allowed and is therefore allowed. The respondent authorities are directed to return the gold bullion 3773.52 gm. seized by them in the course of search on 15/16.02.2020 forthwith to the petitioners after complying with the requirement provided i.e. making a note of inventory.”
To Read the full text of the Order CLICK HERE
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