TMI Blog2023 (11) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... to be kept, or break open the lock of any door, box, locker, safe, cupboard (almirah) or other receptacle of which keys are not available or search any person who is suspected of having on his person any such article or require of any person to afford the authority concerned the necessary facility to have access the articles or to seize such articles found as a result of such search and to place marks of identification on any such articles after making note or inventory if these articles are stock-in-trade. Officer concerned u/s. 132(1) has wide powers of search and seizure of articles mentioned therein which include books of account, other documents, money, bullion, jewellery, other valuable articles. Whereas sub-section (3) of Section 132 can be invoked for imposing similar prohibitory order in regard to various articles which for reasons other than the reasons mentioned in second proviso to Section 132(1) make it impossible or impracticable for the competent authority to take physical possession or to remove. The expression valuable article is not defined in Income-tax Act but is understood in common parlance to include all such things which have value or in other wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order is an outcome of colourable exercise of power by the Revenue Authorities which have wrongly invoked Section 132(3) of IT Act since the facts and circumstances were suitable enough for invocation of Section 132(1). Revenue has failed to satisfy that this was a case which made it impossible/impracticable for Revenue to seize the liquor found at the premises of petitioners and, therefore, it can be presumed that there were no compelling reasons to invoke Section 132(3). Impugned order passed by respondent No.2 u/s. 132(3) of IT Act is set aside. Revenue is saddled with cost of Rs. 10,000/- . - Hon'ble Shri Justice Sheel Nagu And Hon ble Shri Justice Hirdesh For the Petitioners : Shri Sumit Nema Senior Advocate With Shri Sankalp Kochar And Shri Ayush Gupta - Advocates For the Respondents : Shri Siddharth Sharma -Advocate JUDGEMENT JUSTICE SHEEL NAGU PASSED The instant petition filed u/Art. 226 of the Constitution assails order dated 29.09.2023 (Annexure-P/3) passed by respondent No.2 invoking Section 132(3) of the Income Tax Act, 1961 (for brevity, IT Act ) prohibiting petitioners/assessee from removing articles (liquor bottles) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector General or [Principal Director or] Director] or the [Principal Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] [or Additional Director or Additional Commissioner], [or Joint Director or Joint Commissioner] in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under sub-section (1) of Section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of Section 131 of this Act, or a notice under sub-section (4) of Section 22 of the Indian Income Tax Act, 1922, or under sub-section (1) of Section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act, or (c) any per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: [ Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business.] (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing: Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of jurisdiction of any [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner], but such [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in Section 120, it shall be competent for him to exercise the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1). 5. Bare perusal of Section 132(1) elicits that where the Revenue receives information which compels them to believe that any person is in possession of any money, bullion, jewellery or other valuable articles or things and such item represents either wholly or partly undisclosed income for the purpose of Income-tax Act, then Revenue is empowered to enter and search any building, place, vessel, vehicle or aircraft where such articles are suspected to be kept, or break open the lock of any door, box, locker, safe, cupboard (almirah) or other receptacle of which keys are not available or search any person who is suspected of having on his person any such article or require of any person to afford the authority concerned the necessary facility to have access the articles or to seize such articles found as a result of such search and to place marks of identification on any such articles after making note or inventory if these articles are stock-in-trade. 5.1 The Officer concerned u/s. 132(1) has wide powers of search and seizure of articles mentioned therein which inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterary composition in a journal etc.; a paragraph or section; a point of faith, a rule of condition, an item; a commodity or object; (Gram.) one of the words a,n (the indefinite article) and the (the definite article); v.t. to apprentice; to accuse specifically [L. articulus, a little joint]. 1. You can refer to objects as articles of some kind, a formal use ----articles of closing----He had stripped the house of all articles of value ----house-hold articles. 2. If you describe something as the genuine article, you are emphasizing that it is genuine and often that it is very good. The vodka was the genuine article. A separate and distinct part of an instrument or writing comprising two or more particulars ; one of several thins presented as connected or forming a whole. Charter v. Railroad Co., 126 N.C. 437, 36 S.E.14. A particular object or substance, a material thing or a class of things. People v. Epstean, 170 N.Y.S. 68, 73, 102 Misc. 476. Material or tangible object. Gayer v. Whelan, 59 Cal.App.2d 255, 138 P.2d 763, 768. Thing of value. Gayer v. Whelan, 59 Cal.App.2d 255, 138 P.2d 763, 768 In English ecclesiastical law. A complaint exhibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.7 The above definition of valuable , article or thing as understood in common parlance, is that any inanimate thing which has some value or not. 6. The aforesaid definition thus reveals that the expression valuable article / thing being of wide amplitude and inclusive in nature would by all means include liquor. 6.1 Thus, the contention of Revenue that liquor cannot be included in the expression of valuable article is heard to be rejected at the very outset. 6.2 As regards other objection of the Revenue that power of seizure of liquor is exclusively vested with Excise Authorities and thus the Revenue Authorities by implication are denuded of any such power of seizure of liquor is an interesting argument but on close scrutiny is untenable for reasons infra:- 6.3 Coming to sub-section (3) of Section 132, it is seen that the same is an exception to Section 133(1) in its sweep and purpose. Section 132(3) provides that where it is not practicable to seize the said articles (books of accounts, other documents, money, jewellery or other valuable article or thing) for reasons other than those mentioned in second proviso to subsection (1) of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvenience: Reading the second proviso to Section 132(1) and subsection (3) of Section 132, it appears that the Legislature, with effect from April 1, 1989, has regarded certain orders of restraint as amounting to an order of seizure. The phraseology of the two provisions is somewhat identical. Sub-section (3) of Section 132 the authorised officer to pass a restraint order where it is not practicable to seize any such books of account, documents, valuable articles, etc., The second proviso to Section 132(1) also talks of a case where it is not practicable to take physical possession of a valuable article or thing and in which case an order of restraint may be issued but the second proviso would come into play only where it is not practicable to take physical possession of the valuable article for any of the four reasons, viz., due to its volume or weight or other physical characteristics or due to its being of a dangerous nature. To put it differently, if any of these four reasons exists, then the authorised officer need not take physical possession of the articles but can pass a restraint order but such a restraint order will be deemed to be seizure of such valuable articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and the words not practicable to seize used in Section 132(3) have to be understood in this sense, viz., where there is a practicable difficulty in effecting seizure, then an order under Section 132(3) can be passed. Not knowing the value of the articles or whether they are antique or not cannot be regarded as a practical difficulty on the part of the authorised officer in effecting seizure. In our opinion, therefore, the orders which were issued under Section 132(3) were not validly issued and the goods which were found at the premises could have been seized by actually seizing the articles or by making an order of restraint under the second proviso to Section 132(1) of the Act. This was not done in the present case. 9 . Before concluding, it would be appropriate to notice another fallacy of Revenue. Revenue has failed to satisfy that this was a case which made it impossible/impracticable for Revenue to seize the liquor found at the premises of petitioners and, therefore, it can be presumed that there were no compelling reasons to invoke Section 132(3). 10 . In the conspectus of above discussion, this Court has no hesitation to allow the petition in the following t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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