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IN THE HIGH COURT AT CALCUTTA
OM NARAYAN RAI
Miraj Digvijay Shah – Appellant
Versus
Assistant Commissioner of Income Tax, Central Circle I (1), Kolkata – Respondent
JUDGMENT :
Om Narayan Rai, J.
1. This writ petition assails three notices dated October 24, 2025, October 29, 2025 and November 07, 2025 whereby the respondent revenue authorities have intimated the petitioner about their intent to inspect the jewellery, gold bars etc., seized during a search and seizure operation conducted on June 21, 2022 under Section 132 of the Income Tax Act, 1961 (hereafter “the said Act of 1961”).
FACTS OF THE CASE:
2. Briefly summed up, the relevant facts gathered from the writ petition are as follows:-
a) On June 21, 2022 and on other dates subsequent thereto a search operation under Section 132 of the said Act of 1961 was conducted at the residence and office of the petitioner as well as at the bank lockers of the petitioner and the petitioner’s family members.
b) In course of the search and seizure operation, the entire jewellery/bullion (hereafter “the seized assets”) were seized upon being inspected, measured, serially numbered and valued by the valuers approved by the Income Tax Department in accordance with the prescribed search and seizure procedure and the Search and Seizure Manual issued by the Central Board of Direct Taxes.
c) Subsequently, the petition
The necessity for authorities to possess credible information to form a reasonable belief before conducting search and seizure under Section 132 of the Income Tax Act is essential for the validity of....
The main legal point established in the judgment is that the power under Section 131(1A) of the Income Tax Act is not an independent power, but is for the purpose of making an inquiry and investigati....
Seizure under the Income Tax Act should be conducted with due care and caution, and should not be based solely on suspicion. The seizure of goods should be justified and in accordance with the provis....
Seizure of stock-in-trade under the Income Tax Act requires clear evidence of undisclosed income; mere suspicion is insufficient.
The main legal point established in the judgment is that the gold bullion seized during the search was stock-in-trade and duly accounted in the books of accounts, as per the relevant provisions of FE....
The court upheld the legality of search and seizure under Section 132 of the Income Tax Act, asserting that the 'reason to believe' standard is justiciable, but not the adequacy of those grounds.
The power of seizure under Section 67 of the Act is limited to goods liable for confiscation and is not for the recovery of tax but to ensure compliance and aid proceedings against tax evasion.
The court ruled that stock-in-trade cannot be seized under Section 132(1)(iii) of the Income Tax Act, 1961, unless proper justification is provided by the assessee.
Seizure of cash under CGST Section 67(2) invalid absent recorded 'reason to believe' of secretion and relevance to proceedings; automatic return mandated under Section 67(7) if no notice within six m....
Search and seizure under Section 132 of the Income Tax Act requires credible information that justifies belief, and cannot be based on mere suspicion.
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