H. K. Jewels Private Limited & Anr. Vs ADIT Investigation & Ors. (Bombay High Court)
Bombay High Court, in H.K. Jewels Private Limited & Anr. v. ADIT Investigation & Ors., addressed the legality of gold and jewellery seized at Bhubaneswar Airport on May 12, 2024. The petitioners argued that the seizure was unlawful under Section 132(1)(iii) of the Income Tax Act, 1961, which prohibits the seizure of stock-in-trade during a search, allowing only an inventory to be recorded. They sought a writ of mandamus for the release of the seized items.
The Revenue, represented by its counsel, countered that the petitioners had an alternate remedy under Section 132B of the Act. The court noted a dispute regarding the exact date of seizure—May 12 as claimed by the petitioners versus June 1 as per the Revenue. However, it found the core issue to be the legality of the seizure rather than the date. The petitioners had submitted clarifications on July 10, 2024, concerning statements recorded under Section 131(1-A), but had not explicitly raised the argument of seizure being ultra vires the Act.
Citing procedural requirements, the court emphasized that a writ of mandamus could only be issued if the petitioners had made a formal demand for the return of the seized assets and faced refusal. Since no such demand was evident, the court allowed the petitioners a week to submit a detailed representation, including legal provisions they relied upon. The Income Tax Department was directed to review and respond to this representation within two weeks, ensuring a hearing and issuing a reasoned order.
