SMT. KUSUM LATA SINGHAL versus COMMISSIONER OF INCOME TAX RAJASTHAN, JAIPUR AND ORS.

Citation: [1990] 3 S.C.R. 393 · Decided: 16-07-1990 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed
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Judgment (excerpt)

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SMT. KUSUM LATA SINGHAL 
v. 
COMMISSIONER OF INCOME TAX RAJASTHAN, 
JAIPUR AND ORS. 
JULY 16, 1990 
[SABYASACHI MUKHARJI, CJ. AND K. RAMASWAMY, J.) 
Income Tax Act, 1961/Jncome Tax Rules, 1962: Section 132(5), 
(7)/Rule Jl2A-Search and seizure by I. T. authorities-Assessee 
whether entitled to return of valuables. 
The petitioner was carrying on business as a stockist of Baba 
Brand Tobacco. The petitioner's husband, who was a sub-dealer of the 
product, was living with her at all material times. 
)>.. 
A search under section 132 of the Income Tax Act was conducted 
A 
B 
c 
at their house and valuables and books of account seized. A notice 
D 
under rule 112A of the Income Tax Rules read with sub-section (5) of 
section 132 of the Act was served on the petitioner. 
The petitioner filed an application in the High Court under Arti-
cle 226 of the Constitution claiming return of account books and other 
valuables to her. On the other hand, in the proceedings under Section 
132(5) of the Act against the petitioner's husband, he had claimed that 
the ornaments belonged to him and that the same could be treated as 
representing his undisclosed income. 
The High Court came to the conclusion that the authorisation for 
search under section 132(1) of the Act against the petitioner was not in 
accordance with law and, therefore, the seizure of the assets could not 
be said to have been in accordance with law. The High Court however 
noted that in view of the order made under section 132(5) of the Act 
against the husband, the valuables could not be ordered to be returned 
to the petitioner. 
Before this Court, it was contended on behalf of the petitioner 
that if search and seizure were illegal, the items of jewellery were liable 
to be returned. On behalf of the Revenue, it was contended that in a 
situation where there was a dispute as to who was the owner of the 
jewellery and ornaments, the decision of the High Court declining to 
direct their return to the petitioner could uot be faulted. 
393 
E 
F 
G 
H 
A 
B 
c 
394 
SUPREME COURT REPORTS 
[1990] 3 S.C.R. 
Dismissing the special leave petition, the Conrt, 
HELD: ( 1) A dispute as to the ownership of jewellery in question 
cannot be resolved in proceedings under Article 226 of the Constitution 
in the manner sought for by the petitioner. [397F) 
(2) In the instant controversy the Court is not concerned whether 
the proceedings against the husband under section 132(5) of the Act are 
valid or not, bnt irrespective of the validity of the proceedings, the 
evidence or testimony wherein the husband has asserted the ornaments 
and jewellery to be his, cannot be wiped out and does not become 
non-existent. The aforesaid being the factual matrix, the High Court 
was pre-eminently justified in declining to direct retnrn of these items of 
jewellery and other items to the wife. If that is the position, then it 
cannot be said that the High Court has committed any error in law 
which required rectification by this Conrt under Article 136 of the 
Constitution. [397E-G] 
D 
Assainer & Anr. v. Income Tax Officer, Calicut, [1975] 101 ITR 
854; J.R. Malhotra & Anr. v. Additional Sessions Judge, Jul/under, 
[ 1976] 2 SCR 993 and Commissioner of Commercial Taxes, Board of 
Revenue, Madras v. Ramkishnan Shrikishan Jhaver, AIR 1968 SC 59, 
distinguished. 
E 
CIVIL APPELLATE JURISDICTION'. Special Leave Petition 
. -<.~ 
(Civil) No. 15327 of 1989. 
From the Judgment and Order dated 18.7.1989 of the Rajasthan 
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High Court in D.B. Civil Writ Petition No. 2161of1988. 
F 
C.S. Agarwal, H.R. Parekh, S.K. Jain for the Petitioner. 
G 
O.P. Vaish, S. Rajappa and Ms. A. Subhashini for the 
Respondents. 
The Judgment of the Court was delivered by 
SABYASACHI MUKHARJI, CJ. This is a special leave petition 
directed against the judgment and order of the High Court of 
Rajasthan, dated 18th July, 1989. The petitioner herein i.e. Smt. 
Kusum Lata Singhal carried on, at all relevant times, business under 
the name and style of M/s. Lata & Company and she claims to be an 
H authorised stockist of Baba Brand Tobacco manufactured by M/s. 
K.L. SINGHAL v. C.l.T. [MUKHARJI, J.] 
395 
Dharampal Premchand Ltd., New Delhi. Mr. R.K. Singhal is the 
'°. husband of the petitioner. In the judgment under appeal, it has been 
stated that Mr. R.K. Singhal owns a house No. E-117, Shastri Nagar in 
Jaipur and the petitioner lived with her husband at all material times. 
Mr. Singhal was a partner in Lata Sales Ce
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