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TMI Blog1986 (7) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... dy was with the police and it would be inappropriate to accept the position that the Income tax Department which was another Department of the Union of India had to be armed with authority to seize from the unwilling persons. We are in agreement with these views of the learned single judge. In the view of the law as it stood at the relevant time, we are unable to sustain the challenge to the order, impugned in this appeal. The appeal, therefore, fails and is accordingly dismissed with the observations that it will be open to the Income-tax authorities to approach the appropriate authorities to realise any amount of money or to recover any books of account or documents in accordance with law. - 1666 (NT) of 1974 - - - Dated:- 17-7-1986 - R.S. Pathak and Sabyasachi Mukharji, JJ. [Judgment per : Sabyasachi Mukherji, J.]. - This appeal is by special leave from a judgment and order of Punjab and Haryana High Court in an application under article 226 of the Constitution. The judgment in question is reported in 94 I.T.R. 567. By a petition under articles 226 and 227 of the constitution the order of the Income Tax Department dated 10th May, 1972, was passed under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under articles 226 and 227 of the Constitution before the High Court in respect of which the judgment impugned here was rendered. 2. It was submitted that the authorisation warrant was illegal, because the money was not in his possession but was in the possession of the Customs authorities. It was secondly urged that the action taken by the Income-tax authorities under Section 132 of the Act militated the provisions of Section 110(2) of the Customs Act. The High Court felt that so far as the first contention was concerned, it was concluded by the decision of the said High Court in The Commissioner of Income-tax v. Ramesh Chander Others - 93 ITR 450. The High Court relied on the following observations at pages 478-479 of the report: "I have come to the conclusion that the search and seizure warrants issued under sub-section (1) of Section 132 of the Income-tax Act were illegal, firstly, because the search and seizure warrants were issued in the name of Ramesh Chander and he was in fact not in possession of either the currency notes or account books, and, secondly, the income-tax authorities could not seize the currency notes and account books from the police officer who is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be, disclosed] for the purposes of the Indian Income-tax Act, 1922 (XI of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then - (A) the Director of Inspection or the Commissioner, as the case may be, may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income-tax Officer, or (B) such Deputy Director of Inspection or Inspecting Assistant Commissioner, as the case may be, may authorise any Assistant Director of Inspection or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer to -) (i) enter and search any [building, place, vessel, vehicle or aircraft] where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be made to Halsbury's Laws of England, Vol. 35, 4th Edn. articles 1111-1126, pages 617-627. Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys. It appears to us that when the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it would be improper to contend that possession as used in Section 132 of the Act was still with the respondent. The use of the expression "immediate possession" in sub-section (3) of Section 132 does not detract from the meaning of possession in the popular sense. This .construction is not 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 these have been used, it cannot be said 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. In this connection, reference may be made to Burrows Words Phrases Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing, I think, requires neither search nor seizure." 10. Mr. S.C. Manchanda, learned Advocate for the revenue, drew our attention to several decisions including the decision in Noor Mohd. Rahimatulla Gillani, v. The Commissioner of Income-tax, Vidrabha and Marathwada, Nagpur and another,. - 1976 TLR 688. In that case, after referring to the views expressed by the division bench of Allahabad High Court and division bench of Punjab and Haryana High Court in the judgment under appeal and the Calcutta High Court, as indicated before, Chandurkar J. of the Bombay High Court observed as follows: "We are not inclined to accept the submission that no valid authorisation to seize the amount lying with the Collector of Central Excise and Customs, Nagpur could have been issued under Section 132(1). The relevant provision in the instant case is to be found in Section 131(l)(c) of the Act and all that is required in order to issue an authorisation under Section 132(1) is that either the Director of Inspection or the Commissioner must have reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 132(5) that amount was directed to be released." It is true that the title was not transferred to the Customs authorities by seizure under the Customs Act. But in the context, in which the expressions "possession" and "seizure" have been used, it cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title was with the respondent herein. In this context, the physical possession having regard to the language used is relevant and material. Physical possession was with the Customs authorities when the seizure authorisation was passed. Therefore, where the exact location of the property was known and there was no need to seize the money, the Income-tax Department could direct handling over the money to the Income-tax authorities or take steps for such direction through appropriate authorities. In that view of the matter we are unable to sustain the view of Chandurkar, J. as the learned Chief Justice then was of the Bombay High Court. 11. Mr. Manchanda also drew our attention to the case of Pannalal v. Income-Tax Officer, B-Ward, Chhindwara and Others - 93 ITR 480, where the division bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on" and it did not specifically refer to possession by the person who had not disclosed his income. All that the clause required was that the money, bullion etc. should be such which represents either wholly or partly income or property which had not been disclosed for purposes of the Income-tax Act and such money, bullion, etc. should be in the possession of a person. This construction was supported by the use of words "immediate possession" in Section 132(3) of the Act. This was the view of the High Court. There an order under Section 132(3) was passed by the Commissioner of Income-tax on the Collector of Customs and Central Excise in respect of currency notes of the value of Rs.2,02,500 belonging to a firm, which the Collector was holding under the Gold Control Act and which, as no offence was committed under that Act, the collector had ordered to be released. It was also held by the High Court that the Collector was under a legal obligation to return the currency notes to the firm after the proceedings under the gold Control Act had been finalised. The power, of the Collector was only to retain the currency notes for a limited period. It could be held that the currency notes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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