PRABHUBHAI VASTABHAI PATEL Vs. MEENA R P

JUDGEMENT

(1.) THE matter at dispute in this group of petitions is seizure of gold weighing 50 kgs brought in this country by these 10 Writ Petitioners from a foreign country [hereinafter referred to as 'the gold'].

(2.) SINCE the matter centres around the gold, an object of universal avarice, searched and seized by the IT authorities we shall first discuss the law pertaining to search and seizure under the IT Act. Section 132 of the IT Act, 1961 (hereinafter referred to as 'the Act') empowers the Director General or Director or the Chief CIT or the Dy. CIT as may be empowered in this behalf by the Board, inter alia where he has reason to believe that 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 Act, to enter any building or place where he has reason to suspect that such money, bullion, jewellery or other valuable article or thing are kept and to seize any such money, bullion, jewellery or other valuable article or thing found as a result of such search. As prerequisite for exercise of power of search and seizure under s. 132 of the Act, the authorised officer shall have an information in his possession and that in consequence of such information, shall have reason to believe that the 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 Act. The powers of the IT authorities of search and seizure under s. 132 of the Act has been a matter of examination by various High Courts in the country and by the Hon'ble Supreme Court time and again. Learned advocate Mr. J. P. Shah has relied upon the judgments in the matters of N. K. Textiles Mills and Anr. vs . CIT , Commr. of Commercial Taxes and Ors. vs . Ramkishan Shrikishan Jhaver and Ors. : [1967]66ITR664(SC) , H. L. Sibal vs . CIT and Ors. , Ganga Prasad Maheshwari and Ors. vs. CIT (1981) 139 ITR 1043, Vindya Metal Corpn. vs . CIT and Ors. : [1985]156ITR233(All) , Dr. Nandlal Tahiliani vs . CIT and Ors. : [1988]170ITR592(All) ; L. R. Gupta and Ors. vs . Union of India and Ors. : [1992]194ITR32(Delhi) ; Hemal Singh and Anr. vs . Union of India and Ors. ; Janak Raj Sharma vs . Director of Inspection (Investigation) and Ors. ; Chhugamal Rajpal vs . S. P. Chaliha and Ors. : [1971]79ITR603(SC) . Learned advocate Mr. Thakore has relied on the judgment in the matter of Southern Herbals Ltd. vs . Director of Income -tax (Investigation) & Ors. : [1994]207ITR55(KAR) ; and Rugmini Ram Raghav Spinners (P) Ltd. & Ors. vs . Union of India & Ors. : [1992]196ITR674(Mad) .

(3.) WE shall now examine the facts of the present case. On 7th Nov., 1995, these ten writ petitioners arrived in India at the International Airport, Ahmedabad from Sharjah and each of them brought approximately 5 kg. of gold with him. Said writ petitioners disclosed the gold brought by them to the customs authority at the airport and paid due customs duty. Each of the writ petitioners paid more than 1 lakh of rupees by way of custom duty for which a receipt was issued by the custom authority. Said writ petitioners rented rooms at the Agarwal Hotel and were accompanied by two other Indian residents. The police visited the hotel and examined the gold imported by the petitioners and after perusing the receipts of the customs duty paid by the writ petitioners, left the hotel. The customs officers also visited the hotel and being satisfied about the payment of custom duty paid on the gold, they too left. On 8th Nov., 1995, the respondents Nos. 1 and 2 visited the petitioners and respondents Nos. 5 and 6 and served warrants issued under s. 132(1A) of the Act. Said officers also recorded statements of the petitioners and respondents Nos. 5 and 6 and seized the gold. It is the case of respondents Nos. 1 and 2 that they had under s. 132 of the Act upon receiving information from respondent No. 4 Police Sub -Inspector and having considered the information received by them, an opinion was formed that they had reason to believe that the gold brought in by the writ petitioners was brought from unaccounted income or was likely to escape assessment under the Act. One Mr. K. C. Bawa, Police Inspector, Crime Branch has made an affidavit and has stated that after the writ petitioners rented the rooms at the hotel, the Police Sub -Inspector Shri V. K. Ajara, upon information received by him, carried out the raid. Four of the writ petitioners viz. Gopalan Rajendra, Janardhan Vijaya Kumar, Varikapal Somaiya, Ravi Kumar, Kanumatra were found to be in possession of the foreign liquor for which they did not possess valid permit and, therefore, offence was registered against said four persons under the Bombay Prohibition Act being CR No. 415 of 1995. In course of search carried out by Police Sub -Inspector Shri Ajara under the Bombay Prohibition Act, he found the gold in possession of two persons, who were Indian residents, accompanying the writ petitioners. The petitioners informed that they had carried the gold which belonged to one Noorbhai of Dubai and the gold was handed over to one Mohammad Rafiq NCV Konkani who was an employee of New Robinson Tours and Travels, Bombay. The gold was found from room No. 206 which was rented by six persons including Mohammad Rafiq Konkani. It was confirmed by the said six persons that the gold was sent by Noorbhai from Dubai and that the same was to be handed over to one Ahmed Bashir. Said six persons were the residents of India and, therefore, he thought it fit to inform the IT authorities about the gold. He, therefore, informed the Dy. Director of the Income -tax Shri Meena at about 4.00 o'clock in the morning on 8th Nov., 1995. After the arrival of Shri Meena and his staff at the hotel, Police Inspector Shri Bawa apprised them of the situation and gave report in writing. Mr. R. P. Meena, Asstt. Director has filed an affidavit and has stated that upon receiving the information from Shri K. C. Bawa, Police Inspector, he visited the hotel and waited at around 1.30 O'clock in the morning and contacted Shri Bawa who was there interrogating persons occupying room No. 206. After Shri Bawa drew a report, he handed over copies of the report and the statements recorded by him to Shri Meena. It was learnt that the gold belonged to one Noorbhai of Dubai and was carried by the writ petitioners as carriers. The gold was handed over to Mohammed Rafiq Konkani at the airport after the petitioners paid customs duty. Immediately an inquiry was made through the Asstt. Director of Income -tax (Investigation), Bombay. The information received from the Bombay authorities disclosed that no person in the name of Ahmed Bashir stayed at the given address. It was learnt that the office of M/s New Robinson Tours and Travels was not situated at the given address. Considering this material, i.e. the information received from Shri Bawa and the report made by him, the statements recorded by Shri Meena in the early hours of 8th Nov., 1995 and the information received from the IT authorities at Bombay, it was clear that the identity of the person to whom the gold was to be delivered in India and the identity of the person who was the real owner of the gold was in doubt. Thus, considering the information received as above, a note of satisfaction was put up at around 9.15 hours in the morning of 8th Nov., 1995. Said note of satisfaction was examined by the Director (Investigation) and after examining the note placed before him and the report made by the Inspector Shri Bawa and the information received from the IT authorities at Bombay, the Director (Investigation) issued a warrant of authorisation under s. 132 of the Act in the name of Mohammed Rafiq Konkani occupant of room No. 206 of Hotel Agarwal. Accordingly, a search was carried out on 8th Nov., 1995 at around 11 o'clock in the morning in presence of two independent witnesses. The search was concluded at around 8.00 p.m. The gold found was seized from room No. 206 and was sealed.