SONA BAI JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS order shall also dispose of M.P. No. 238 of 1983, Smt. Chandabai v. The Union of India and 5 Ors. Both these petitions under Article 226 of the Constitution are directed against the seizure of gold and gold ornaments by the Income Tax Officer, D -Ward, Gwalior under Section 132 of the Income Tax Act, 1961.

(2.) ON 26.5.1981, the preventive staff of Central Excise, Indore searched the residential premises of one Bhogiram Jain, who was a partner of M/s. Jain and Sons, Lashkar. The search resulted in the recovery of primary gold and gold ornaments, weighing 1133.250 gms in total as detailed in the Panchnama, Annexure 'P -1'. The premises were inhabited by Bhogiram's wife Smt. Sona Bai and daughter -in -law Smt. Chanda Bai, besides Bhogiram and others. Out of the gold and gold ornaments recovered, ornaments weighing 529.000 gms. and 434.500 gms. respectively were shown belonging to Smt. Sona Bai and Smt. Chandabai in Annexure 'B' to the Panchnama, Annexure 'P -1'. Smt. Sona Bai claimed 4 new gold bangles weighing 28.500 gms. and primary gold weighing 94.000 gms., shown at S.No. 1, 7 and 8 in the list of ornaments found in the second cloth bag in Annexure 'A' to the Panchnama, Annexure P -1, as her own, besides claiming the gold ornaments weighing 529.000 gms, which were shown belonging to her in Annexure 'B' to the Panchnama. By his order, dated 28.8.1982, the Collector, Central Excise directed release of the gold ornaments to their owner, but made an order of confiscation in respect of 94.000 gms. primary gold with liberty to Smt. Sona Bai to redeem the same on payment of fine of Rs. 10,000/ - in lieu of confiscation, in addition to penalty of Rs. 2,000/ - under the provisions of the Gold (Control) Act, 1968. After payment of fine and penalty, Smt. Sona Bai claimed return of the primary gold and 4 gold bangles, besides claiming the ornaments mentioned in Annexure 'B' to the Panchnama as belong to her. Similarly, Smt. Chanda Bai also claimed possession of the ornaments, which were shown belonging to her in the said Panchnama. However, the gold and gold ornaments could not be delivered to them in view of the warrant of authorisation under Section 132A(1) of the Income Tax Act, 1961 issued by the Commissioner in Income Tax in favour of the Income Tax Officer. Smt. Sona Bai and Smt. Chanda Bai have, therefore, filed the said petitions. During the pendency the petitions, assessment case started against Bhogiram on the basis of the recovery of said gold and gold ornaments was competed on 30.3.1985 and all ornaments and gold seized by the Central Excise Department on 26.5.1981 from residential premises of Bhogiram were held to be assets representing unexplained income of Bhogiram and subject to tax.

(3.) THE learned counsel for the Excise Department did not advance any arguments, but the learned counsel for the Income Tax Officer tried to support the seizure by resorting to the provisions of Sections 132 and 132A of the Income Tax Act, 1961. It was also submitted that the finding of the Collector, Central Excise was not binding on the Income tax Department and that in the assessment made during the pendency of the petition, they have been found to be that of Bhogiram by -the Income Tax Officer, and, therefore, there is no justification in the claim for return of ornaments made by Smt. Sona Bai and Smt. Chanda Bai. It was also argued that Commissioner of Income tax was a necessary party to the petition and in his absence, no relief could be granted to the petitioners.