ing been subsequently filled in by introducing section 132A of the Act with effect from October 1975 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 the law
307D E  CIVIL APPELLATE JURISDICTION Civil Appeal No1666 NT of 1974
297 From the judgment and order dated 26th November 1973 of the A Punjab  Haryana High Court in Civil Writ No 3355 of 1972
SC Manchanda MB Rai and Ms A Subhashini for the Appellants
Harbans Singh for the Respondents
The Judgment of the Court was delivered by SABYASACHI MIJKHARJI 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 By a petition under articles 226 and 227 of the Constitution the order of the Income Tax Department dated 10th May 1972 passed under section 132 of the Income tax Act 1961 hereinafter called the Act  and Rule 112II of the Income tax Rules 1962 hereinafter called the Rules  was challenged
The division bench by the impugned judgment allowed the petition quashed the search and seizure warrants and directed the Income Tax Department to return the moneys to the Customs authorities and gave certain consequential directions
In order to appreciate the points involved it is necessary to refer to certain facts as found by the High Court
On 23rd August 1970 the petitioner before the High Court who is the respondent here was travelling by car alleged to be belonging to his brother from Ambala to Batala
He was intercepted near the Beas river by the Customs officer and was forcibly taken along with the driver Gurnam Singh to the Customs House at Amritsar
The said petitioner in that application was searched along with his driver and the Customs authorities took into possesion Rs93500 in Indian currency 10 gold sovereigns and the car
On the 24th August 1970 the petitioner was produced before a Duty Magistrate at Amritsar and was granted bail
In the meantime the Customs department took proceedings under section 1102 of the and extended the period of issuing of the show cause notice under section 124 of the 
These proceedings were challenged in the High Court by Writ Petition and the order of the Customs authority under section 1102 was quashed by an order of the learned single judge of the High Court on 24th April 1972
The appeal against that decision was dismissed by the division bench along with this petition by the High Court
After the said judgment of the learned single judge the respondent had approached the Customs authorities for the return of H 298 the money and the car
The gold sovereigns were not demanded be cause according to the said petitioner these did not belong to him
He had been directed to come on the following day to get back the currency notes and the car
In the meantime on 12th May 1972 the Income tax officer had served the warrant of authorisation dated 10th May 1972 issued under section 132 of the Act and rule 112II of the Rules on the respondent as well as on the Customs department with the result that only the cash was taken possession of by the income tax authorities
Thereafter the respondent filed the petition under articles 226 and 227 of the Constitution before the High Court in respect of which the judgment impugned here was rendered
It was submitted that the authorisation warrant was illegal be cause 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 1102 of the 
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 vs Ramesh Chander  Ors 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 duty bound to proceed with the case property in accordance with the pro visions of the Code of Criminal Procedure
 The High Court held that where the amount was seized by the Customs authorities and the seizure was held illegal by the Court Customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the 
The Income tax authorities could not seize such an amount from the Customs authorities under section 132 of the Act
Moreover the authorisation was illegal if issued in the name of the person who did not have possession of the article in respect of which it was issued
The High Court further held that in the facts and circum 299 stances of the case the order under section 132 of the Act was not Justified
Therefore the High Court held that the search and seizure warrants were liable to be quashed and the money returned to the customs department
The judgment of the High Court is reported in The validity of the judgment is impugned in this appeal
It is necessary in order to appreciate the contentions urged in this case to refer to the relevant provisions of section 132 of the Act
Sub section  I of section 132 provides as follows Search and Seizure 1 Where the Director of Inspection or the Commissioner or any such Deputy Director of Inspection or Inspecting Assistant Commissioner as may be empowered in this behalf by the Board 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 XI 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 112 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 be 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 proceeding under the Indian Income tax Act 1922 XI of 1922 or under this Act or 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 H 300 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 box locker safe almirah or other receptacle for exercising the powers conferred by clause i where the keys thereof are not available iiasearch any person who has got out of or is about to get into or is in the building place vessel vehicle or aircraft if the authorised officer has reason to suspect that such person has secreted about his person any such books of account other documents money bullion jewellery or other valuable article or thing iiiseize any such books of account other documents money bullion jewellery or other valuable article or thing found as a result of such search iv place mark of identification on any books of ac count or other documents or make or cause to be made extracts or copies therefrom 301 v make a note or an inventory of any such money bullion jewellery or other valuable article or thing  The only other sub section to which reference need be made is sub section 3 which is as follows B The authorised officer may where it is not practicable to seize any such books of account other document money bullion jewellery or other valuable article or thing serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub section
 It is not necessary to refer to the other provisions for the present purpose
But the procedure indicated that if necessary force may be used for search seizure
Rule 112 of the said Rules provides the manner in which such search and seizure should be conducted
On a construction of the section and the context in which the words search possession and seizure have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority
It is important to note that the expression possession has not been defined in the Act
It may be noted that sub section 3 of section 132 of the Act uses the expression who is in immediate possession or control thereof
Possession is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense
Reference may be made to Halsbury s Laws of England Vol 35 4th Edn
articles 1111 11267 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 302 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 Judicial Dictionary 4th Edn
page 306
All these aspects were discussed by the Calcutta High Court by one of us Sabyasachi Mukharji J singly in Laxmipat Chororia vs KK Ganguli  ors 82 l
TR 306 Cal
This decision was affirmed on appeal and the bench decision of the said Court is reported in 93 IT R at p 489
This aspect of the matter has been clearly dealt with by a judgment of the division bench of the Allahabad High Court in Motilal and ors
vs Preventive Intelligence officer Central Excise and Customs Agra and others where the judgment was delivered by one of us RS Pathak J
There the Court held that the power conferred under section 1321 of the Act was contemplated in relation to those cases where the precise location of the article or thing was not known to the Income tax department and therefore a search was necessary for it and where it would not be ordinarily yielded over by the person having possession of it
The view that section 1323 of the Act would include a case where the location of the article or thing was known and where ordinarily the person holding custody of it would readily deliver it up to the Income tax department was not correct it was so held by the division bench of the Allahabad High Court
It was further held that consequently goods in the custody of the Assistant Collector of Customs and Central Excise were not things which could be the subject of an order under section 1323 of the Act
Pathak J spoke for the division bench there at p 422 of the report thus In my opinion the power conferred under section 1321 is contemplated in relation to those cases where the precise location of the article or thing is not known to the income tax department and therefore a search must be made for it and where it will not be ordinarily yielded over by the person having possession of it and therefore it is necessary to seize it
If it is only such article or thing which 303 is contemplated by section 1321 then it is such article or A thing alone which can be the subject of an order under section 1323
I am unable to accept the contention on behalf of the Income tax department that section 1323 will include a case where the location of the article or thing is known and where ordinarily the person holding custody of it will readily deliver it up to the Income tax department
Such article or thing I think requires neither search nor seizure  Mr SC Manchanda learned advocate for the revenue drew our attention to several decisions including the decision in Noor Mohd Rahimatulla Gillani vs The Commissioner of Income tax Vidrabha and Marathwada Nagpur and another 1976 Taxation Law Reports 688 Bombay
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 1321
The relevant provision in the instant case is to be found in Section 1321 c of the Act and all that is required in order to issue an authorisation under Section 1321 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 jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed for the purposes of the Act or the Income tax Act of 1922
It is the character of money or assets as undisclosed income or property and their possession that gives jurisdiction to issue the authori risation
Merely because some authority has seized that money or property its character which is believed to be that of undisclosed income or property does not change
The seizure of the cash amount of Rs305530 by the 304 Central Excise Authorities in the instant case no doubt transferred physical possession of that amount from the petitioner to the Central Excise Department but the legal ownership of that money still continued to be with the petitioner
As long as that amount was not confiscated or did not become the property of the Central Excise Depart ment by virtue of an order passed under the relevant provision of law if at all any order could be so passed the property or the money did not cease to be that of the petitioner
Though the Collector of Central Excise and Customs was in possession of the money since its alleged character of being undisclosed income or property remained unattended the Collector satisfied the description of any person being in possession of undisclosed income or property though the property represented the undisclosed income or property of the petitioner himself
The words used in section 1321 c are any person
Such a person may be a person who is in possession of his own undisclosed income or property or a person who is in possession of somebody else s undisclosed income or property
The fact that the Collector of Central Excise and Customs happened to be an officer of the Government of India was not relevant because the Income tax Authorities and the Central Excise Authorities were functioning under two separate enactments which created two different liabilities the enforcement of which was entrusted to independent authorities under the law
Disagreeing therefore with the authorities relied upon by the 3 petitioner we must hold that the authorisation issued even against the Collector of Central Excise and Customs enabling the Income tax officer to seize that amount was a valid authorisation
In any case in the instant case a subsequent order under section 1323 was already made and even by the order under section 1325 that amount was directed to be released
 It is true that the title was not transferred to the Customs authorities by seizure under the 
But in the context
in which the expressions possession and seizure have been used it p 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 posses 305 sion having regard to the language used is relevent 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 handing 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
Mr Manchanda also drew our attention to the case of Pannalal vs Income Tax officer B Ward Chhindwara and ors
 93 ITR p480 MP where the division bench of the Madhya Pradesh High Court was of the view that an order under section 1323 could only be passed after an authorisation for search and seizure had been made under section 1321 of the Act
The thing in respect of which the order is made must be one regarding which the conditions mentioned in clauses a b and c of section 132 are satisfied
But there was nothing in the requirements of section 132 to support the view that if the Commissioner has definite knowledge that the books of account documents money bullion etc sought to be searched and seized are in the possession of a particular person he cannot issue an authorisation for search and seizure of the same
In our opinion
it may be mentioned that if the location was certain then there was nothing to search or look for
Madhya Pradesh High Court however observed that the expression has reason to believe signified that the Commissioner has reason to be satisfied that the things to be searched are in the possession of a particular person
The object of section 132 was according to the High Court not merely to get information of the undisclosed income but also to seize the money bullion etc
representing the undisclosed income and to retain
them for purposes mentioned in section 1325
Section 1321C of the Act did not contain a condition either expressly or impliedly that the thing to be seized should not be in the possession of a person who may willingly part with his possession
There is no obligation on any one not even on Government officers of other department to deliver anything to G the income tax authorities except when the law requires them to do so
The person authorised by the Commissioner could enter and search any building break open the lock of any door etc
But that did not mean that in every case the person authorised by the warrant would have to exercise all those powers in making the search and seizing the thing according to the High Court
It was not necessary that an actual 306 search must precede an order under section 1323 directing a person not to part with articles in his possession
Section 1321c did not contemplate that the person who has not disclosed his income or property for the purposes of the Income tax Act should himself be in possession of money bullion etc
representing such income
Clause c spoke of any person who is in possession 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 1323 of the Act
This was the view of the High Court
There an order under section 1323 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 Rs202500 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 were held by the Collector for and on behalf of the firm and the order passed under section 132 was valid
For the reasons mentioned hereinbefore we are unable to sustain that view of the High Court
As mentioned before though legal title might have been with the person whose income was sought to be taxed the physical possession was with the Customs authorities
Our attention was drawn to a bench decision of the Madras High Court where similar view was taken in Gulab and Company and Anr
vs Superintendent of Central Excise Preventive Trichy and ors
For the reasons we have indicated hereinbefore we are also unable to sustain this view
The Kerala High Court in the case of Assainar and Anr
vs Income tax Officer Calicut and on also accepted this view
We are for the aforesaid reasons unable to sustain this view with respect
The High Court observed that the word search has varied meanings and it should be given the general meanings to look for or seek which are also well known
But in the context the expression seizure and in the context 307 the expression search where the location of the property was known A to the Government we are of the opinion that it could not be said that one government department could search any other government department and seize those documents
Relying on the decision of the Allahabad High Court in Motilal s case supra as well as the decision of the Calcutta High Court in Laxmipat s case supra the learned single judge of the Punjab and Haryana High Court in Ramesh Chander vs Commissioner of Income Tax supra held that the word seizure implied forcibly taking from the owner or who has the possession and who was unwilling to part with the possession
In that case custody 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
This view of the learned single judge has been confirmed in the judgment of the division bench already referred to hereinbefore reported in 93 ITR p 450
The lacuna in law has subsequently been filled in by 132A of the Act with effect from October 1975
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
In the facts and the circumstances of the case parties will pay and bear their respective costs
SR Appeal dismissed


Summary:
On 23rd August 1970 when the respondent was travelling by car alleged to be belonging to his brother from Ambala to Batala the Customs officer intercepted him near the Beas river and forcibly taken along with the driver Gurunam Singh to the Customs House at Amritsar
The respondent along with the driver was searched and the customs authorities took into possession Rs33500 in Indian currency 10 gold sovereigns and the car in which he travelled
The Customs authorities thereupon initiated departmental proceedings under section 110II of the and extended the period of issuing of the show cause notice under section 124 of the 
These proceedings were quashed by an order of the Learned Single Judge of the High Court of Punjab on 24th April 1372 following an earlier decision of that Court
After the said judgment the respondent approached the customs authorities for the return of the money and the car on 1151972
The gold sovereigns were not demanded because ac cording to the respondent these did not belong to him
He had been directed to come on the following day to get back the currency notes and the car
On the next day however the Income Tax officer served the warrant of authorisation dated 10th May 1972 issued under section 132 of the Income Tax Act read with Rule 112II of the Rules on the respondent as well as on the customs department with the result the cash was taken possession of by the Income Tax authorities
Thereafter 295 the respondent filed another writ petition under Article 226 and 227 of A the Constitution
The customs authorities also filed an appeal against the decision of the Single Judge dated 24th April 1972
The writ petition and the appeal were heard together by a Division Bench of the Punjab High Court
Dismissing the appeal and allowing the writ petition the High Court held that where the amount was seized by the customs authorities and the seizure was held illegal by the Court customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the  that the Income Tax authorities could not seize such an amount from the customs authorities under section 132 of the Income Tax Act and authorisation of search and seizure was illegal if issued in the name of the person who did not have possession of the Article in respect of which it was issued
Hence this appeal by the revenue by special leave
Dismissing the appeal the Court  HELD 11 on a construction of section 132 of Income Tax Act 1961 and the context in which the words search possession and seizure have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority where the location of the property was known to the Government one government department could not search another department and seize them
301E F 12 Sub Section 3 of section 132 of the Act uses the expression who is in immediate possession or control thereof
Possession is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense
Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys
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 cannot be said that possession as used in section 132 of the Act was still with the respondent Tarsem Kumar
30 1F H 13 Reading the expressions retention and custody in some of the sub sections of section 132 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
302A B 296 The Commissioner of Income Tax vs Ramesh Chander  Ors
 PunJab Tarsem Kumar  Anr
vs The Commissioner of Income Tax Haryana Himachal Pradesh  Delhi  ors
  Laxmipat Chororia vs KK Ganguli Motilal and ors
vs Preventive Intelligence officer Central Excise and Customs Agra  Ors Allahabad distinguished and partly overruled
Noor Mohd Rahimatulla Gillani vs The Commissioner of Income tax Vidrabha and Marathwada Nagpurand Anr 1976 Taxation Law Reports 688 Bombay Pannalal vs Income Tax officer Ward
Chhindwara and ors
 93 ITR p 480 Madhya Pradesh Gulab and Company and Anr
vs Superintendent of Central Excise Preventive Trichy and ors
 Madras Assainar and Anr
vs Income tax officer Calicut and ors
 Kerala overruled
14 It is true that in the instant case the title was not transferred to the Customs authorities by seizure under the 
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 handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities and not by resort to section 132 of the Income Tax Act
This is so because if the location was certain then there was nothing to search or look for
304G H 305A B