9911796707
TMI Blog1970 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... h was conducted by the customs authorities under the reasonable belief that the moneys in the hand of the Chorarias represented the sales proceeds of smuggled goods. During the search it appears that the officers of the income-tax department were also present. On the 14th February, 1967, the income-tax authorities in Bombay served a warrant of authorisation under section 132 of the Income-tax Act, 1961, issued by the Commissioner of Income-tax, Calcutta. As a result of the said authorisation issued by the Commissioner of Income-tax, Calcutta, the said sum of Rs. 42,774 was taken away by the income-tax authorities from the customs authorities. Thereafter, on the 22nd February, 1967, a notice was issued, asking Laxmipat Choraria to submit an explanation in writing as to the nature of possession and the sources of acquisition of the money recovered from the customs authorities in Bombay, by the income-tax authorities. This notice was issued under section 132(5) of the Income-tax Act, 1961. Laxmipat Choraria by a letter written by his authorised representative stated that the said section had no application. Thereupon, on the 12th May, 1967, an order was passed under section 132(5) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to be considered in this case is whether there could have been an order under section 132 for seizing the goods of the petitioner from the custody of the customs. It is therefore necessary to set out the relevant portion of section 132 of the Income-tax Act, 1961. " 132 Search and seizure.-(1) Where the Director of Inspection or the 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 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 proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him ; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act ; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized : Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, contended that the immediate possession was with the customs, but the legal possession, according to him, was with the petitioner. He obviously drew his inspiration from sub-section (3) of section 132 of the Income-tax Act, 1961, where the expression "immediate possession" has been used ; but I do not think that the expression "immediate possession" in any way detracts from the meaning of possession in the popular sense as I have construed in the context of the section. I am not also unmindful of the fact that in some of the sub-sections of section 132 the expressions "retention" and "custody" have been used ; but reading these expressions in the context they have been used I do not think that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income-tax Act, 1961. On the meaning of the expression "possession" reference may be made to Burrows Words & Phrases Judicial Dictionary, 4th edition, page 306. But there is another aspect which compels me to hold that in this case it could not be said that possession was with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he law as regards possession. A 'seizure' under the authority of law does involve a deprivation of possession and not merely of custody and so when the police officer seized the goods, the accused lost possession which vested in the police. In my opinion the aforesaid observations of the Supreme Court are apposite to the facts and circumstances of this case. In this case when the customs authority seized the goods the petitioner not only lost custody but possession and it cannot thereafter be contended that they were in possession of the goods and moneys as I have mentioned before. Mr. Sen, learned counsel for the respondent, contended that this is a case under the Customs Act and should not be relied on in deciding a question under the Income-tax Act. I am, however, unable to accept this contention of Mr. Sen. The next case on which reliance was placed was the case of Durga Prasad v. H. R. Gomes, Superintendent (Prevention), Central Excise, Nagpur. There what had happened was that after certain orders of authorisation when the documents were in the custody of the Government, there were subsequent orders of authorisation. Mr. Ginwala contended that in the instant case before me it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs authority. Mr. Sen contended that the officers of the customs were outside the jurisdiction of this court. Furthermore, the impugned order passed by the customs authorities and the search and seizure by the customs authorities took place outside this State. Mr. Sen, therefore, contended that this application, so far as the customs were concerned, was not maintainable in this High Court. I am, however, unable, to accept this contention of Mr. Sen. What is being challenged is the improper authorisation of the income-tax department under section 132 of the Income-tax Act ; that order was passed within the jurisdiction of this court. Furthermore, the records of the income-tax department are within the jurisdiction of this court. But for this authrisation the moneys could not have been retained by the customs. Therefore, the customs authorities were necessary parties to this application and the cause of action which is the subject-matter of the grievance of the petitioner arose within the jurisdiction of this court. In that view of the matter it must be held that this court has jurisdiction. As mentioned hereinbefore I have held that the original order of authorisation und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
