K RAJU Vs. INCOME TAX OFFICER THIRD

JUDGEMENT

(1.) ONE K. Raju is the petitioner in both the writ petitions. W.P. No. 181 of 1983 is for the issue of a writ of mandamus directing the respondents, in particular, the 7th respondent, to return all the seized materials to the petitioner immediately including the fixed deposit receipts, etc., covered by the prohibitory orders to the banks. W.P. No. 182 of 1983 is for the issue of a writ of prohibition prohibiting the respondents from passing any order in respect of the search and seizure effected on March 3, 1982, and March 4, 1982, at the premises of the petitioner at No. 2/D, S. V. Lingam Street, K. K. Nagar, Madras-78, at the work-shops at (i) H.I.G. Flat Site, Ashok Pillar Road, K. K. Nagar, Madras-78, and (ii) Open Plot in Jeevanandam Street, K. K. Nagar, Ashok Nagar, Madras-83, and at Seelanaickenpatti, Salem.

(2.) THE writ petitioner is a building contractor and a regular Income-tax assessee from the assessment year 1972-73. On March 3, 1982, the 7th respondent, under the purported instruction of respondents Nos. 5 and 6, made a search under s. 132 of the I.T. Act (hereinafter referred to as "the Act") simultaneously at No. 2/D, S. V. Lingam, Salai, K. K. Nagar, Madras-78, H.I.G. Flat Site, Ashok Pillar Road, K. K. Nagar, Madras-78, and at the open plot in Jeevanandam Street, K. K. Nagar, Ashok Nagar, Madras-83. In respect of the seizure, a panchnama was prepared and givens to the petitioner. While searching the premises at No. 2/D, S. V. Lingam, Salai, K. K. Nagar, Madras-78, the 7th respondent had locked up one room with the petitioner's records and served a prohibitory order on the petitioner under s. 132(3) of the Act. Similarly, the residence of the petitioner at Seelanaickenpatti, Salem, was searched and in that house, a steel almirah was sealed and a prohibitory order under s. 132(3) of the Act was given to the petitioner. After the search, a panchnama was prepared and the same was served upon the petitioner. THE 7th respondent had further served a prohibitory order under s. 132(3) of the Act to the various banks whereby the petitioner was not allowed to operate either the savings bank account or any other account the petitioner is having with the respective banks. Correspondingly, similar prohibitory orders were issued under s. 132(3) of the Act on the petitioner also. It is further alleged by the petitioner that on his representation to the 7th respondent stating that his business is being paralysed by such prohibitory orders, the 7th respondent by his order dated March 6, 1982, released a sum of rupees one lakh and had also pointed out therein that the prohibitory order for the balance of Rs. 3,78,498.90 in S.B. Account No. 11078 shall continue to be in force. It is further alleged by the petitioner that by subsequent representation made by the petitioner, the 7th respondent had lifted the prohibitory order issued to some other banks also. THE petitioner was writing letters to the 7th respondent to release certain documents seized from him. On August 20, 1982, the petitioner wrote a letter to the 7th respondent pointing out that not withstanding the fact that originally the search was commenced on March 3, 1982, and completed on that day itself, rooms had been locked and sealed by the 7the respondent and he having taken the key with him, nothing had been done thereafter, and that, therefor, the 7th respondent should release the fixed deposit receipts and other documents so that the petitioner could deal with the same. On November 2, 1982, and November 8, 1982, the petitioner wrote to the 7th respondent requesting for lifting of prohibitory order and also pointing out that the order had not been passed by the 7th respondent in time. THE petitioner also wrote to various respondents herein to release the fixed deposit receipts and other documents. THE petitioner has further specifically alleged that he was seriously prejudiced in so far as his fixed deposit receipts had been seized along with several other documents, that prohibitory orders had been issued whereby the moneys belonging to the petitioner were seized and, as such, the petitioner has been deprived of the use of the money which he could have lawfully used for his business, and that his business has practically come to a standstill by reason of the improper attitude of the respondents herein. THE petitioner has further alleged that the authorities concerned have failed to pass orders under s. 132(5) of the Act within 90 days of the seizure of the documents and, as such, the seizure has become ineffective. Under s. 132(9A) of the Act, according to the petitioner, respondents Nos. 5 to 7, who had seized the materials, should be handed over all these materials seized from the petitioner within 15 days of such seizure. In this case, the documents and assets seized from the petitioner have not been handed over by the 7th respondent to the 1st respondent within 15 days from March 4, 1982. THE seizure of the documents and other records having been made on March, 3, 1982, and March 4, 1982, the retention of the documents any further has become illegal since the authorities concerned ought to have passed orders under s. 132 of the Act within 90 days from March 4, 1982. Even assuming that the seizure was completed on September, 30, 1982, the petitioner submits, there is a clear violation of s 132(5) of the Act. THE petitioner has further contended that as per s. 132(8) of the Act, the books of account and other documents seized shall not be retained for a period exceeding 180 days from the date of seizure unless the reasons for retaining the same are recorded in writing by the officer who seized the same and the approval of the Commissioner for such retention is obtained. No order has been communicated to the petitioner so far regarding any extension that has been granted is accordance with s. 132 of the Act. Hence, the documents seized cannot be retained by the authorities concerned any further and such a retention is clearly illegal since the seized documents are with them for over 180 days. It is further contended by the petitioner that the respondents have not communicated any order passed for extension. According to the petitioner, the respondents also have not conformed to rules 112, 112A, 112B, 112C and 112D of the I.T. Rules. Since the provisions of the Act and the Rules have not been complied with, the petitioner has stated that the respondents are bound to return the materials, documents and moneys seized to the petitioner. THE attitude of the respondents in keeping these documents beyond the period of limitation prescribed under the Act is violative of the freedom of profession, trade and occupation guaranteed under art. 19(1)(g) of the Constitution of India. In these circumstances, the petitioner submitted that the retention of the materials seized from him and the continuancee of the prohibitory orders as against him by the respondents herein are clearly outside their powers and jurisdiction and that they cannot hereafter pass any order and if such orders are passed, they would be void, illegal, a nullify and not-est. With these allegations, the petitioner has prayed for the issue of a writ of mandamus and a writ of prohibition, as stated in the beginning of the judgment.

(3.) SECTION 132(9A) of the Act deals with cases as to how the Authorised Officer, who has no jurisdiction over the person from whose custody the books of account and other documents are seized, should hand over within 15 days from such seizure, the seized documents to the ITO having jurisdiction over such a person.