TMI Blog1983 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... een completed up to the assessment year 1976-77 and the assessing authorities throughout accepted the declaration of the said gold ornaments as her wealth. The petitioner's husband is Shyam Sundar Dhoot. He is a separate assessee under the provisions of the Wealth-tax Act as well as the Income-tax Act (No. XLIII of 1961) (for short, " the Act "). The mother-in-law of the petitioner, Smt. Rukma Bai Dhoot, was also assessed separately under the Wealth-tax Act. Both of them were regularly submitting separate returns and paying taxes as per the assessment orders duly passed in their cases from time to time. According to the petitioner, she owned and possessed 150 tolas of old gold ornaments disclosed in the returns. The petitioner's husband and her mother-in-law possessed 150 tolas and 200 tolas of gold ornaments, respectively. A search under section 132(1) of the Act was commenced in the case of the petitioner's husband on August 23, 1979. The petitioner, her husband and their children and mother-in-law were living in a common house. During the course of search of the residential premises and lockers, the gold ornaments belonging to the petitioner and her mother-in-law were counted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was exchanged between the petitioner and the Income-tax Officer that it was on account of the delay caused by the petitioner in not explaining the variation between the two lists that the ornaments could not be returned to her. It may be, mentioned that one list was submitted by the petitioner with the wealthtax return and the other along with the affidavit. There were discrepancies in the two lists and as she did not appear to explain the discrepancies, the ornaments were not returned. It was submitted that it was on account of the delay caused by the petitioner by not explaining the discrepancies in the two lists, that the delivery could not be made. In S.B. Civil Writ Petition No. 1492 of 1981, it has further been stated that during the course of enquiry under section 132(5) of the Act, it came to be known that the authorities under the Gold (Control) Act (No. XLV of 1968) (hereinafter referred to as " the Act of 1968 "), were also contemplating to seize the gold ornaments in question as soon as the same were released. It has been alleged that the petitioner also came to know that the Income-tax Officer was directed not to release the aforesaid gold ornaments till the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated on January 21, 1981. The petitioner received letter No. 722, dated January 20, 1981, by which she was informed that the keys of the locker were not available as such operation of the locker has been postponed to January 30, 1981. Nothing was done on January 30, 1981. The petitioner filed S. B. Civil Writ Petition No. 951 of 1981 in this court praying for an appropriate writ, order or direction for the release of the said gold ornaments as aforesaid. S.B. Civil Misc. Stay Petition No. 881 of 1981 was also filed. S.B. Civil Writ Petition No. 951 of 1981 was admitted and notice of the stay petition was issued. After notice, the stay petition was heard on July 13, 1981, and the Income-tax Officer was directed to return the ornaments seized from the petitioner within 15 days from that date. The petitioner, after the passing of the order on July 13, 1981, submitted an application on July 17, 1981, before the Income-tax Officer mentioning the contents of the interim order. He was requested to return the seized gold ornaments. The Income-tax Officer informed the petitioner, vide his letter dated July 25, 1981, to come to his office in connection with the release of the gold ornaments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of, prohibition may be issued restraining the non-petitioners., inclusive of the Collector, Assistant Collector and the Superintendent from effecting seizure of the gold ornaments weighing 150 tolas being in her possession, custody or control, which were seized by the Income-tax Authorities at the time of raid and which were ordered to be released by this court on July 13, 1981. Show-cause notice was ordered to be issued on July 27, 1981. In pursuance of that reply has been filed on behalf of non-petitioners Nos. to 4 (Union of India, Collector, Assistant Collector and Superintendent) reserving right to file final reply. The main ground taken in the reply is that the family of Shyam Sundar Dhoot (husband of the petitioner) consists of his wife, and his children and it possessed and had in custody the gold ornaments of more than 4,000 grams gold and, thus, in this way there has been contravention of section 74 of the Act of 1968, which is punishable. According to the aforesaid non-petitioners Nos. 1 to 4, the total quantity of gold seized by the Income-tax Department from the possession, custody and control of Shyam Sundar Dhoot exceed the permissible limit given un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, AIR 1962 SC 316, 330, as follows: "....it would on the terms of the section, have to be satisfied that the seizure was made in the reasonable belief that the goods seized were goods that had been smuggled. At that stage the enquiry is not and cannot be confined as to whether the seizing-officer bona fide entertained the belief, but must necessarily extend to an examination of the grounds upon which that belief was entertained with a view to ascertain whether the belief was reasonable." It was also so held in Narayanappa v. CIT [1967] 63 ITR 219 (SC). After examining section II 0 of the Customs Act, 1962, their Lordships of the Supreme Court in Assistant Collector of Customs v. Charan Das Malhotra, AIR 1972 SC 689, ruled that the expression " reason to believe " in that section was not absolutely subjective inasmuch as the reasons for the belief have to be relevant and not extraneous and the principle enunciated in Narayanappa v. CIT [1967] 63 ITR 219 (SC) was applied. In the light of the principles laid down by their Lordships of the Supreme Court in the aforesaid decisions, I am of the considered opinion that section 66 of the Act of 1968 does not permit an indiscriminate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be, owned, possessed, held or controlled by,-... (ii) a family exceeds four thousand grammes: ...... (6) For the purposes of this section, ' family ' shall be deemed to consist of, (i) the husband, wife and one or more minor children, or..." According to section 16(5), the total weight of gold ornaments belonging to the petitioner and her husband, Shyam Sunder Dhoot, was 300 tolas (i.e., 3,499.14 grams), which is less than 4,000 grams which is exempted under section 16(5) of the Act of 1968. There is nothing on the record on the basis of which it could be said that there was any reason to believe that in respect of the gold owned or which was in possession, custody or control of the petitioner or her husband, any possession of the Act of 1968 has been or is being attempted to be contravened. There is nothing to show that any breach of any of the provisions of the Act of 1968 has been committed. The non-petitioners had no power to seized the gold ornaments of 150 tolas in respect of which no contravention of the provisions of the Act of 1968 has been done. The power of seizure in the absence of the condition precedent being fulfilled cannot be exercised. In Kashi Nath v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , vide his letter dated 11-3-1968, explained the source of acquisition of 150 tolas of gold ornaments by stating that these ornaments were received by the assessee from her mother, mother-in-law and other relatives as well as on the occasion of marriage, birth of children, marriage of other relatives, etc. It was also explained in that letter that it was difficult to reconcile the date on which a particular ornament was received by her. have verified the wealth-tax records of Smt. Pushpa Devi and the contention of the assessee is found to be correct. Therefore, it is held that 150 tolas of gold ornaments belonging to Smt. Pushpa Devi Dhoot seized along with ornaments of Shri S. S. Dhoot should be released to her on request." The Income-tax Officer has no authority to retain the gold ornaments of 150 tolas belonging to the petitioner which were seized along with the ornaments of Shyam Sundar Dhoot at the time of the raid under section 132(1) of the Act. He is directed to deliver the ornaments belonging to the petitioner in pursuance of the order, annexure 1, dated November 16, 1979. The result is that S.B. Writ Petition No. 1492 of 1981 is allowed and the non-petitioners [Union ..... X X X X Extracts X X X X X X X X Extracts X X X X
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