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Judgment
K.M. Agarwal, J.—This order shall also dispose of M.P. No. 238 of 1983, Smt. Chandabai v. The Union of India and 5 Ors. Both these petitions under Article 226 of the Constitution are directed against the seizure of gold and gold ornaments by the Income Tax Officer, D-Ward, Gwalior u/s 132 of the Income Tax Act, 1961.
On 26.5.1981, the preventive staff of Central Excise, Indore searched the residential premises of one Bhogiram Jain, who was a partner of M/s. Jain & Sons, Lashkar. The search resulted in the recovery of primary gold and gold ornaments, weighing 1133.250 gms in total as detailed in the Panchnama, Annexure "P-1". The premises were inhabited by Bhogiram''s wife Smt. Sona Bai and daughter-in-law Smt. Chanda Bai, besides Bhogiram and others. Out of the gold and gold ornaments recovered, ornaments weighing 529.000 gms. and 434.500 gms. respectively were shown belonging to Smt. Sona Bai and Smt. Chandabai in Annexure "B" to the Panchnama, Annexure "P-1". Smt. Sona Bai claimed 4 new gold bangles weighing 28.500 gms. and primary gold weighing 94.000 gms., shown at S.No. 1, 7 and 8 in the list of ornaments found in the second cloth bag in Annexure "A" to the Panchnama, Annexure P-1, as her own, besides claiming the gold ornaments weighing 529.000 gms, which were shown belonging to her in Annexure "B" to the Panchnama. By his order, dated 28.8.1982, the Collector, Central Excise directed release of the gold ornaments to their owner, but made an order of confiscation in respect of 94.000 gms. primary gold with liberty to Smt. Sona Bai to redeem the same on payment of fine of Rs. 10,000/- in lieu of confiscation, in addition to penalty of Rs. 2,000/- under the provisions of the Gold (Control) Act, 1968. After payment of fine and penalty, Smt. Sona Bai claimed return of the primary gold and 4 gold bangles, besides claiming the ornaments mentioned in Annexure "B" to the Panchnama as belong to her. Similarly, Smt. Chanda Bai also claimed possession of the ornaments, which were shown belonging to her in the said Panchnama. However, the gold and gold ornaments could not be delivered to them in view of the warrant of authorisation u/s 132A(1) of the Income Tax Act, 1961 issued by the Commissioner in Income Tax in favour of the Income Tax Officer. Smt. Sona Bai and Smt. Chanda Bai have, therefore, filed the said petitions. During the pendency the petitions, assessment case started against Bhogiram on the basis of the recovery of said gold and gold ornaments was competed on 30.3.1985 and all ornaments and gold seized by the Central Excise Department on 26.5.1981 from residential premises of Bhogiram were held to be assets representing unexplained income of Bhogiram and subject to tax.
The learned counsel for the petitioners submitted that the warrant of authorisation issued by the Commissioner of Income tax was in respect of the assets taken into custody by the Central Excise Department from the possession of Bhogiram. Consequently the gold and gold ornaments belonging to Sona Bai and Chanda Bai could not be seized by the Income Tax Officer. In support of his contention, he also relied on a letter, dated 28.7.1983 (Annexure "P-9" in M.P. No. 238/83) written by the Income Tax Officer to Smt. Chanda Bai, saying that no prohibitory order was issued in her case.
The learned counsel for the Excise Department did not advance any arguments, but the learned counsel for the Income Tax Officer tried to support the seizure by resorting to the provisions of Sections 132 and 132A of the Income Tax Act, 1961. It was also submitted that the finding of the Collector, Central Excise was not binding on the Income tax Department and that in the assessment made during the pendency of the petition, they have been found to be that of Bhogiram by -the Income Tax Officer, and, therefore, there is no justification in the claim for return of ornaments made by Smt. Sona Bai and Smt. Chanda Bai. It was also argued that Commissioner of Income tax was a necessary party to the petition and in his absence, no relief could be granted to the petitioners.
There is no dispute that the finding of Collector Central Excise is not binding on the Income Tax Department. Similarly, it cannot be disputed that u/s 132A(1) of the Income Tax Act, 1961, the Commissioner of Income Tax was competent to authorise seizure of the disputed gold and gold ornaments and u/s 132(5) of the Income Tax Act, the Income tax Officer had power to make assessment in respect of such gold and gold orgnaments. Yet, the power to seize cannot extend beyond the authorisation made by the Commissioner of Income Tax u/s 132A(1) of the Income Tax Act. The warrant of authorisation annexed with Annexure "P-8" would show that the Income tax Officer was authorised to take delivery of the assets taken into custody by the Central Excise Department from the possession and control of Shri Bhogiram. It did not authorise him to take possession of all assets found in the residential premises of Bhogiram or the assets, which were shown belonging to Smt. Sona Bai and Smt. Chanda Bai. The Income Tax Officer could not, therefore, seize or take possession of the gold ornaments which were shown "belonging to Smt. Sona Bai and Smt. Chanda Bai in Annexure "B" to the Panchnarna, Annexure "P-1". The seizure of these gold ornaments and refusal to return the same to Smt. Sona Bai and Smt. Chanda Bai by the respondents in pursuance of the authorisation made u/s 132A(1) of the Income Tax Act by the Commissioner of Income tax in favour of the Income tax Officer were, therefore, clearly illegal and without jurisdiction.
Smt. Sona Bai also claimed 4 gold bangles weighing 28.500 gms. and the primary gold weighing 94.000 gms. as her own. They were not shown belonging to Smt. Sona Bai in the Panchnama Annexure "P-1". They were held belonging to her by the Collector, Central Excise on the basis of her statement and the statement of her husband Bhogiram for limited purpose of the provisions of the Gold (Control) Act, 1968. Consequently, Smt. Sona Bai''s claim for return of 4 gold bangles and the primary gold in this petition cannot be accepted. The reason is that the warrant of authorisation authorised the Income Tax Officer to take possession of assets which were taken into custody by the Central Excise Department from the possession or custody of Bhogiram. The Panchnama, Annexure "P-1" prima facie shows that the said 4 gold bangles and the primary gold were taken into custody by the Excise Department from the possession of Bhogiram.
As a result of our foregoing discussion, we are of the view that Smt. Sona Bai''s petition deserves to be partly allowed and that of Smt. Chanda Bai deserves to be allowed in toto. Smt. Sona Bai is not entitled to claim return of primary gold weighing 94.000 gms. and 4 gold bangles weighing 28.500 gms., but she is entitled to the return of gold ornaments weighing 529.000 gms. as detailed in Annexure "B" to the Panchnama. Smt. Chanda Bai is entitled to the return of gold ornaments weighing 434.500 gms. as detailed in Annexure "B" to the Panchnama. The details of gold ornaments belonging to Smt. Sona Bai and Smt. Chanda Bai as mentioned in Annexure "B" to the Panchnama, Annexure "P-1" are given below :-
Gold ornaments belonging to Smt. Sona Bai:-
1 lksus dh pwM+h ux lesr 6 105&000 xzke 12]500
2 lksus ds gkFkQwy �uxlesr� 2 120&000 xzke 13]000
3 ekyk lksus dh piMh Mksj lesr 1 80&000 xzke 5] 700&00
4 ekyk lksus dh ux lesr 1 53&00 xzke 3]000&00
5 ckcwpUn �uxlesr� 2 66&000 xzke 5]500&00
6 gkjux lesr 1 105&000 xzke 11]250&00x
VksVy 539&000 Xkzke 53]550&00
Gold Ornaments belinging to Smt. Chanda Bai:-
1 lksus dh pwMh 8 107&000 xzke 10]000 &00
2 lksus dh pSu 4 46&000 xzke 5]500&00
3 av�xwBh ux lesr 4 11&500 xzke 1]000&00
4 pSu lksus dh 2 22&000 xzke 2]000&00
5 gkj �ux lesr� 2 51&000 xzke 5]550&00
6 VkEl �ux lesr� 3 7&000 xzke 750&00
7 Bqlh Mksjk ux lesr 1 75&000 xzke 5]700&00
8 cxjh 2 �eksrh lesr� 2 68&000 xzke 6]000&00
9 ekyk eksrh yxh gqbZ 1 41&000 xzke 3]000&00
10 uFk �ux lesr� 1 6000 xzke 400&00
VksVy 435&500 xzke 39]900&00
The contention that the Commissioner of Income Tax is a necessary party to the petitions, cannot be accepted, because no challenge has been made to the authorisation issued by him. The contention was that the seizure made by the Income tax Officer was in excess of the authority given to him by the Commissioner of Income Tax.
In the result, the petition of Smt. Sona Bai is partly allowed and that of Smt. Chanda Bai is allowed in toto. We direct the respondents to return the gold ornaments weighing 529.000 gms. to Smt. Sona Bai and the ornaments weighing 434.500 gms. to Smt. Chanda Bai which have been shown belonging to them in Annexure "B" to the Panchnama, Annexure "P-1". The claim of Smt. Sona Bai over 4 gold bangles weighing 28.500 gms. and over the primary gold weighing 94.000 gms. is rejected. In the circumstances of the case, the parties are directed to bear their costs as incurred. The outstanding amount of security be refunded to the petitioners.