BHUPENDRA RATILA THAKKAR AND ANR. versus COMMISSIONER OF INCOME TAX, GUJARAT & ORS

Citation: [1976] 2 S.C.R. 891 · Decided: 05-12-1975 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

-' 
' 
..... 
·' .. 
891 
BHUPENDRA RATILA THAKKAR AND ANR. 
v. 
COMMISSIONER OF INCOME TAX, GUJARAT & ORS 
December 5, 1975 
[A. N. RAY, C. J., M. H. BEG, R. S. SARKARIA AND 
P. N. SHINGHAL JJ.] 
Income Tax Act Sec. 132, I32A-lncome Tax Rules 1962, rules 112, 112A, 
112B, 112C--Co11;;itufi(lnal validity of-Co11stitution of India, Articles 14, 
19(1 )(f) & (g) and 31 (I). 
The petitioners carry on business as Shroffs and Bankers. 
The Income-tax 
A 
B 
Department searched various premises of the petitioners and seized a sum of 
C 
Rs. 12 lakhs in cash from the petitioners, under section 132 and 132A of the 
Income-tax Act. 
The petitioners contended that the said amount represented 
the stock-in-trade of the petitioners. 
The petitioners also contended !Ii.at the 
provisions of section 132 and J 32A of the Income-tax Act, 1961, as well as 
mies 112, 112A, 112B and 112C of the Income-Tax Rules, 1962, were uncon-
stitutii>nal as violative of Articles 14, 19(1)(f) and (g) and 31(1) of the 
Constitution. Section 132 and 132A were further challenged on the ground of 
conferring naked, abitrary, unguided, discriminatory and uncanalised power on 
the executive authority. 
D 
Dismissin~ the petition, 
HELD: (!) This Court has already upheld in Poora11 Mal's case the validity 
of section 132 and 132A as well as rules 112 and J l2A. 
[893 A & C] 
(2) Rules 112B and 112C relate to the release of the articles seized and are 
therefore benefici"I rules and as such cannot be challenged. 
[893D] 
ORIGINAL JURISDICTION : Writ Petition No. 96 of 1972. 
Under Article 32 of the Constitution of India. 
I. N. Shroff for the appellant/petitioner. 
B. B. Ahuja and S. P. Nayar for respondents. 
The Judgment of the Court was delivered by 
SHINGHAL J. This is a petition under article 32 of the Constitution. 
Bhupendra Ratilal Thakkar, petitioner No. 1, is the managing part-
. ner of the other petitioner M/s Rajnikant Nareshchandra Shroff, 
which is a partnership firm carrying on the business of "shrofis and 
E 
F 
. bankers". 
Its principal place of business is said to be at Mehmada-· 
_ bad, with branches at Surat and Bombay. 
The petitioners applied 
G 
for registration of the firm on April 7, 1971, and had time to file 
their return of income upto June 30, 1972. It has been claimed that 
the' firm had large sums of money in cash as well as 'hundis' and other 
bills of excha•age which formed its stock-in-trade and that there was 
no justification for thinking that it wocid not do what was required 
to be done under the law relating to income-tax. 
The firm had 
a 
·sum of Rs. 12,00,000/- as cash on January 10, 1972, which is said 
H 
to have been duly entered in its books of account in the Bombay 
branch office. 
The grievance of the petitioners 1s that some of the 
2-L277SCf/76 
.. 
892 
SUPREME COURT REPORTS 
[1976] 2 S.C.R. 
A 
respondents entered these premises on January 10, 1972, "in purport-
ed exercise of the powers conferred by section 13 2", and seized the 
sum of Rs. 12,00,000/- along with the books of account and other 
documents. 
Searches are also said to have been carried out in Meh-
medabad office and the branch office at Surat, and some more books 
8 
c 
D 
E 
G 
H 
of account, papers and documents are said to 
have 
been 
seized 
..;;,. 
there. 
The petitioners have_ stated that as the sum of R~. 12,00,000/-
was the stock-in-trade of the firm, and it had not been secreted, there 
was no justification for the seizure of the money or the books and 
the other documents. 
They have accordingly stated that the seizure 
was an abuse of the authority conferred by ss. 132 and 132-A of the 
Income-tax Act, 1961, herein.after referred to as the Act, and rules 
112, 112-A, 112-B, 112-C and 112-D of the Income-tax Rules, 
1962, hereinafter referred to as the Rules. The petitioners !rave con-
tended that ss. 132 and 132-A of the Act are unconstitutional be-
cause they are violative of articles 14, 19 ( 1 )(f) and (g) and 31 (1) 
of the Constitution. 
It has also been urged that the aforesaid rules 
are illegal as they are not backed by any legal authority. 
The afore-
said provisions have also qeen challenged on the ground that they 
are violative of article 14. In regard to ss. 132 a:id 132-A of the 
Act, the petitioners have further stated that they should be struck 
down as they confer naked, arbitrary, unguided, discriminatory and 
uncanalised power on the executive authority. 
The petitioners have 
also prayed for the restoration 

Excerpt shown. Read the full judgment & AI analysis in Lexace.