PETITIONER:
DR. KARAN SINGH
Vs.
RESPONDENT:
STATE OF JAMMU & KASHMIR & ANR.
DATE OF JUDGMENT20/12/1985
BENCH:
TULZAPURKAR, V.D.
BENCH:
TULZAPURKAR, V.D.
PATHAK, R.S.
CITATION:
1986 AIR 585 1985 SCR Supl. (3)1069
1986 SCC (1) 541 1985 SCALE (2)1467
ACT:
Wealth Tax Act, 1957, s.5(1)(xiv) – Claim for exemption
in respect of jewellery and valuable articles of personal
use lying in Toshakhana – Assessee in wealth tax proceedings
claiming ownership – State contesting the claim - CBDT
informing assessee to arrange physical inspection - High
Court approached with application for inspection – Refusal
of inspection by High Court - Validity of – Necessity for
inspection indicated.
HEADNOTE:
The appellant filed a writ petition in the High Court
claiming ownership and title of six boxes containing
jewellery and other valuable articles lying in Srinagar
Toshakhana. These were kept under lock and seal of the
Commissioner appointed by the High Court. The petition was
the result of two matters pending before the Government of
India: (1) Whether the appellant was the owner of the
jewellery or other valuable articles of personal use lying
in those boxes on the ground that the properties are
heirlooms, and (ii) whether exemption in respect of such
items of properties as heirlooms under s.5(1)(xiv) of the
Wealth Tax Act in wealth tax assessment proceedings of the
appellant as HUF was available to him or not. Pursuant to a
request and the suggestion of the Central Board of Direct
Taxes to have physical inspection of the items in question
by the Members (W.T.&J) alongwith experts to establish
whether the properties are heirlooms or not, an application
was accordingly moved before the High Court for inspection
of the jewellery and other articles. The High Court
dismissed the application on the ground that no useful
purpose will be served to grant inspection.
Being aggrieved, the appellant appealed to this Court.
The appeal was opposed by counsel for the Respondents on the
grounds (i) that the appellant’s claim of ownership or title
to these items has been refuted in the counter-affidavit
that had been filed in the main Writ Petition where property
has been claimed to be State property; (2) that unless the
appellant showed some prima facie title to the property in
question, inspection would be premature and uncalled for,
and (3) that the writ petition itself was not maintainable
in view of Article 363 (1) of the Constitution.
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Allowing the appeal,
^
HELD: 1(i) The order dated July 20, 1985 is clearly
erroneous, and inspection sought ought to have been granted.
The six boxes containing the jewellery and other valuable
articles lying in Srinagar Toshakhana shall be opened for
the purpose of inspection by the Member, Central Board of
Direct Taxes (WT&J) who will be accompanied by the Director
General of Archaelogical Survey of India, Director Antiques,
Director National Museum and Approved Valuers of Jewellery
for determining whether any and if so what items constitute
heirlooms or articles of personal use of the appellant and
his family. Such inspection will be taken in the presence of
the appellant’s representative as also a representative of
the State Government but such representatives shall not work
on the panel of the Inspection Committee but may render
assistance as may be necessary. [1073 E-G]
(ii) The relevance and necessity of such inspection in
the instant case cannot be disputed. The main issue arising
between the parties is whether the jewellery and other
valuable articles of personal use contained in the six boxes
lying in Srinagar Toshakhana are heirlooms of the appellant
and his family as claimed by him or not. Such inspection by
experts will unquestionably facilitate its determination.
[1072 B-C]
2. Questions of maintainability of the writ petition
and appellant’s title to the property in question would
undoubtedly be gone into at the final hearing of the writ
petition but it cannot be gainsaid that the inspection by
experts will be useful for determination of the appellant’s
title to the property. At this stage no one can proceed on
the assumption that the preliminary objection as regards
maintainability will necessarily be upheld Moreover, the
assessment order for the 3 assessment years, 1978-79, 1979-
80 and 1980-81 though made on protective basis and subject
to final valuation of the assets, clearly show that the
Wealth Tax Authorities, and the CBDT are treating the estate
lying in the Srinagar Toshakhana as property belonging to
the appellant’s family. [1072 F-H; 1073 A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5720 of
1985.
From the Judgment and Order dated 20.7.1985 of the J. &
K. High Court in CMP No. 645 of 1985 in W.P. No. 122 of
1983.
Soli J. Sorabjee, J.B. Dadachanji, F.H. Talyarkhan,
S.P. Gupta, Mrs. A.K. Verma and D.N. Mishra for the
Appellant.
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B. Datta, Additional Solicitor General, Gauri Shankar
S.N. Kacker, R.N. Poddar, Ms. A. Subhashini, M. Beg, E.C.
Agarwala, Z.A. Shah, Pradeep Bakshi and Lalit Gupta for the
Respondents.
The Order of the Court was delivered by
TULZAPURKAR, J. Leave granted.
Heard Counsel for the parties as also for CBDT and
Wealth Tax Officer.
The short question raised in this appeal is whether
inspection of the jewellery and other valuable articles of
personal use contained in six boxes lying in Srinagar
Toshakhana - which boxes are at present kept under lock and
seal of the Commissioner appointed by the J & K High Court
under its order dated June 22, 1984 - was improperly
declined by the learned Single Judge by his order dated July
20, 1985 pending disposal of the main writ petition no. 122
of 1984. The learned Judge has rejected the appellant’s
prayer for inspection by observing thus:
“Be that as it may, at this stage without
speculating on the merits of the petition, I find
that no useful purpose will be served by granting
relief to the petitioner which he has prayed in
the present CMP.”
According to the appellant there were two matters
before the Government of India (i) whether the appellant was
the owner of the jewellery or other valuable articles of
personal use lying in those boxes on the ground that the
properties are heirlooms and (ii) whether exemption in
respect of such items of properties as heirlooms under
s.5(1) (xiv) of the Wealth Tax Act in Wealth Tax Assessment
proceedings of the appellant as HUF was available to him or
not and for both these matters it was necessary to have an
inspection of the items by experts to establish whether the
properties are heirlooms or not. In fact the prayer for
inspection was made by him on the basis of two letters one
dated 12th of February 1985 and the other dated 13th of
June, 1985 issued from the Ministry of Finance, Central
Board of Direct Taxes, particularly the former wherein, in
the context of the appellant’s application for exemption
under s.5(1) (xiv), it was suggested by the CBDT that the
appellant should arrange for the physical inspection of the
items in question by the Member (WT&J) who would be
accompanied by some experts such as Director General,
Archaelogical Survey of India; Director Antiques,
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Director National Museum and Approved Valuers of jewellery
and others for that purpose. Even then the prayer for such
inspection was rejected.
The relevance and necessity of such inspection in the
context of the two matters that are pending before the
Government of India cannot be disputed, for, the main issue
arising between the parties is whether the jewellery and
other valuable articles of personal use contained in the six
boxes lying in Srinagar Toshakhana are heirlooms of the
appellant and his family as claimed by him or not and such
inspection by experts will unquestionably facilitate its
determination. We, therefore, fail to appreciate how the
learned Judge felt that no useful purpose will be served by
the inspection sought by the appellant.
Counsel for the Union of India as well as the learned
Advocate General of J & K appearing for the State
strenuously urged before us that the appellant’s claim of
ownership or title to these items has been refuted in the
counter affidavits that have been filed in the main writ
petition where the property has been claimed to be State
property and in this behalf reference was also made to one
of the preliminary objections raised by the Union of India
to the maintainability of the writ petition on the ground
that at the time of the settlement arrived at between the
acceding Ruler Maharaja Hari Singh and Government of India
no such claim was made and that under Art. 363(1) of the
Constitution neith Government/Merger agreement nor any
dispute or obligation arising therefrom is justiciable and
therefore the writ petition deserves to be dismissed. It
was, therefore, urged that unless the appellant shows some
prima facie title to the property in question inspection
would be premature and uncalled for. Questions of
maintainability of the writ petition and appellant’s title
to the property in question would undoubtedly be gone into
at the final hearing of the writ petition but it cannot be
gain-said that the inspection by experts which will have a
bearing on the nature and character of the property in
question will be useful for determination of the appellant’s
title to the property in case the preliminary objection
fails and at this stage no one can proceed on the assumption
that the preliminary objection will necessarily be upheld.
But apart from this, on prima facie title, the claim for
exemption under s.5(1)(xiv) of the Wealth Tax Act (under
both the limbs of the provision) was pending before the
Wealth Tax authorities and we are now informed that for the
three assessment years, 1978-79, 1979-80, 1980-81 assessment
orders under the Wealth Tax Act have
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been passed by the Wealth Tax Officer, A Ward, Jammu wherein
the estate belonging to the appellant’s family lying in the
Srinagar Toshakhana has been valued at a considerably
enhanced figure over and above the value returned by the
appellant in his returns, and the exemption claimed by him
under s.5(1) (xiv) of the Wealth Tax Act in respect of the
heirlooms has been declined and his estate has been
assessed. The relevant portion in each of the assessment
orders in this behalf runs thus:
“2. The assessee has claimed exemption of this
estate (estate lying in Srinagar Toshakhana) under
s.5(1) (xiv) of the W.T. Act, 1961. However, I
have been given to understand that the CBDT has
not given recognition to the claim of the
assessee. Therefore, the estate is assessed.”
The appellant has challenged these assessment orders in
appeals which are pending. These assessment orders, though
made on protective basis and subject to the final valuation
of the estates, clearly show that the Wealth Tax
authorities, and the CBDT, Revenue Department, Ministry of
Finance, Government of India are treating the estate lying
in the Srinagar Toshakhana as property belonging to the
appellant’s family.
Having regard to the aforesaid facts the impugned order
dated July 20, 1985, in our view, is clearly erroneous and
the inspection sought ought to have been granted.
We, therefore, direct that the six boxes containing the
jewellery and other valuable articles lying in Srinagar
Toshakhana under the lock and seal of the Commissioner of
the High Court shall be opened for the purposes of
inspection by the Member, Central Board of Direct Taxes
(WT&J) who will be accompanied by the Director General of
Archaelogical Survey of India, Director Antiques, Director
National Museum and Approved Valuers of jewellery for
determining the true nature and character of the same and
whether any and if so what items constitute heirlooms or
articles of personal use of the appellant and his family.
Such inspection will be taken in the presence of the
appellant’s representative as also a representative of the
State Government but such representatives shall not work on
the panel of the Inspection Committee but may render such
assistance as may be necessary to the members of the panel.
The Inspection Committee will complete the inspection and
submit its report to the High
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Court within three months from the commencement thereof. The
parties are directed to obtain further directions in the
matter of such inspection from the High Court.
Appeal is allowed. No costs.
M.L.A. Appeal allowed.
1075