No HC comfort for Nirav Modi company in I-T Dept’s painting public sale
The Bombay High Court Monday refused to grant any alleviation to diamantaire Nirav Modi’s corporation Camelot Enterprises which had challenged closing week’s auction through the Income Tax Department of a few paintings and artwork belonging to the firm.
The petitioner, Camelot Enterprises, a shell agency in which Nirav Modi holds over ninety-nine consistent with cent stocks, had approached the high court docket remaining week challenging the tax evaluation record of the I-T Department, and the branch’s subsequent notice featuring the restoration lawsuits via the stated auction.
A bench of Justices Akil Kureshi and Sarang Kotwal, but, rejected the petitioner’s prayers for comfort, noting amongst different matters, that on the problem of the assessment order, Camelot had immediately approached high court rather than submitting an enchantment earlier than the concerned Appellate Tribunal.
The bench also referred to that by using no longer interfering with the public sale that turned into hung on March 26 this year; it turned into now not placing the petitioner via an “irreversible state of affairs.”
“The petitioner does no longer claim any particular attachment to any painting or artwork. It hasn’t challenged their valuation,” the bench stated.
“In case the petitioner succeeds before the Appellate Authority, the quantity recovered with the aid of the department thru the public sale may be lower back to it with interest,” it stated.
The petitioner had also argued that the branch had “failed” to serve, in a proper way, notices, both for the evaluation of dues and the auction.
It said the department had served notices to 2 of its directors, Ramesh Assar and Hemant Bhatt.
While Assar had resigned from the company while the notices have been received in September remaining 12 months, Bhatt becomes in judicial custody on time.
Instead, Bhatt’s son obtained the attention and told the branch that he becomes incapable of replying to the identical.
Therefore, the provider of such notices need to be held invalid by way of the courtroom, the petitioner argued.
It similarly said of the 68 paintings positioned up for auction using the department, most effective 19 belonged to the business enterprise.
Therefore, the department ought to no longer have sold what did now not belong to Camelot or Nirav Modi.
Additional Solicitor General Anil Singh, who regarded for the I-T Department, however, argued that Camelot had merely made a declaration denying possession of all the paintings and paintings placed up for public sale.
It had no longer supplied any felony evidence to prove that it did now not own all the art work and artwork, Singh said.
Instead, “searches and inquiries performed through the department” had led to the recuperation of a total of 173 paintings and paintings belonging to the corporation.
Such artwork was saved in a warehouse in Wadala, and the branch had initiated the public sale of 68 of such paintings and artwork to get better its tax dues, following valid note and procedure, Singh said.
The ASG further argued that though the public sale had been marketed and notified on its internet site and in newspapers, nobody had come ahead to say ownership of such artwork and artwork which Camelot claimed did now not belong to the agency.
Therefore, it proved that every one artwork and artwork were owned with the aid of Camelot, Singh said.
Besides, Singh argued, if Camelot indeed did now not own the closing paintings, then, it had no felony proper or locus standi to undertaking their sale.
On the difficulty of the provider of being aware, the ASG argued that during consonance with the law, the branch had despatched notices of the tax evaluation and the restoration lawsuits to the petitioner agency and its recognized administrators, Assar and Bhatt, through pace publish and emails.
He also stated Assar became proven by means of the petitioner to have resigned from the business enterprise a day after the notice for healing proceedings were dispatched.
There turned into additionally no proof to prove that Assad had indeed resigned at the stated date, he stated.
The bench agreed that the petitioner had didn’t provide any evidence to prove that it owned best 19 artwork.
“There is not any explanation for why the petitioner, who claims to very own simplest 19 artwork, had stored the closing artwork on the same place at the warehouse, at its price. Also, no one has come forward to assert possession of the ultimate paintings. Therefore, the petition cannot take haven under this floor,” the bench stated.
Last month, a Prevention of Money Laundering Act (PMLA) courtroom had allowed the I-T Department to public sale selective artwork — 68 of the 173 objects recovered by way of the branch and the Enforcement Directorate in a seek — allegedly belonging to Nirav Modi, to recover tax arrears.
The ED had provisionally attached the artwork, as a part of the investigation into the Rs 13,500-crore Punjab National BankNSE 0.70 % fraud.