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PUNJAB & HARYANA HIGH COURT
R.S.Narula and M.R.Sharma JJ.
H.L.Sibal
Versus
Commissioner Of Income-tax And Ors.
Civil Writ No. 150 of 1975,
Decided On : JULY 15, 1975
Whether the premises of the petitioner were searched on the basis of valid reasons or the action was taken against him on the basis of some policy decision can be determined by considering the totality of the attendant circumstances.
Fact of the Case:
The petitioner, a leading advocate, challenged the legality of a search and seizure operation conducted by the Income Tax authorities at his premises. The authorities claimed to have acted under Section 132 of the Income Tax Act, 1961, alleging that the petitioner had undisclosed income and assets. The petitioner denied the allegations and contended that the search was conducted without proper authorization and that the authorities had acted with malice.
Finding of the Court:
The court found that the Commissioner of Income Tax did not have any specific information or reasonable belief to authorize the search under Section 132. The court held that the search was conducted as a matter of policy against a group of lawyers, including the petitioner, and that the authorities had fabricated evidence to justify their actions. The court also found that the seizure of Rs. 10,000 from the petitioner was illegal and that the subsequent proceedings under Section 132(5) of the Act were vitiated by the illegality of the search.
Issues: 1. Whether the Commissioner of Income Tax had sufficient information to authorize the search under Section 132 of the Income Tax Act, 1961? 2. Whether the search was conducted as a matter of policy against a group of lawyers, including the petitioner? 3. Whether the authorities fabricated evidence to justify their actions? 4. Whether the seizure of Rs. 10,000 from the petitioner was illegal? 5. Whether the subsequent proceedings under Section 132(5) of the Act were vitiated by the illegality of the search?
Ratio Decidendi: The court held that the Commissioner of Income Tax did not have any specific information or reasonable belief to authorize the search under Section 132. The court held that the search was conducted as a matter of policy against a group of lawyers, including the petitioner, and that the authorities had fabricated evidence to justify their actions. The court also found that the seizure of Rs. 10,000 from the petitioner was illegal and that the subsequent proceedings under Section 132(5) of the Act were vitiated by the illegality of the search.
Final Decision: The court quashed the search warrant and the proceedings under Section 132(5) of the Act. The court also ordered the return of the seized documents and the sum of Rs. 10,000 to the petitioner. The court further directed that a complaint under Section 193 of the Indian Penal Code be filed against the respondents for fabricating false evidence.
R.S.Narula and M.R.Sharma JJ.
1. The petitioner, Shri H. L. Sibal, is an advocate of this court. On October 17, 1974, while he was, working in his office at about 7-30 a.m., respondent No. 3 entered his office and showed him a warrant under Section 132 of the Income-tax Act, 1961 (hereinafter called "the Act"), authorising him to search the premises of the petitioner. Respondent No. 3 was at that time accompanied by respondent No. 4 and some other officials of the income-tax department. He also brought Major D. S. Brar and Shri P. L. Verma, retired Chief Engineer--Panch witnesses--to witness the search.
2. The case of the petitioner is that he informed respondent No. 3 that he had to appear in some cases before this court including a part-heard case in which he was to represent the Punjab State and the Punjab State Electricity Board, but he was ordered by respondent No. 3 not to leave his premises. The reason given was that the latter had been ordered by his superior officers in that behalf.
3. The son of the petitioner, Shri Kapil Sibal, advocate, was coming by air from Delhi and the wife of the petitioner was preparing to leave by car to receive him but she was also not allowed to leave the house.
4. Shri Gurdial Singh Mann, a retired P. C. S. officer, and his wife had been staying with the petitioner for the last 4/5 days, because the father of the former was lying ill in the Post Graduate Institute of Medical Education and Research (P.G.I.). Chandigarh. They had been lodged in the guest room of the house in which their luggage was also kept. Shri Mann wanted to leave the premises for some work but the raiding party did not allow him to do so.
5. The search of the premises was commenced at about 8-30 a.m. and it concluded at about 5-30 p.m. The raiding party also wanted to make a search of the luggage of Shri Mann and his wife to which Shri Mann objected. The petitioner also requested respondent No. 3 that it was unfair to conduct a search of the luggage of a guest because this action tantamounted to insulting the guest as well as the host. Upon this, respondent No. 3 is stated to have told them that he would like to take instructions from his superior officers in the matter. Consequently, he rang up respondent No. 2, who in turn asked him the name and address of the guest. These particulars having been supplied on telephone the warrant authorising the search of the luggage of Shri Mann was also received within about half an hour. The petitioner alleges that blank warrants of search signed by the Commissioner were available at Chandigarh, which were filled in at this place and were issued against Shri Mann. . From this, he infers that there could possibly be no information with the Commissioner against Shri Mann and that the former had not applied his mind before issuing the search warrants. The result of the search also revealed that Shri Mann had no such connection with the petitioner which could be taken notice of by the income-tax authorities.
6. During the course of the search, the raiding party took into possession a cash amount of Rs. 10,000 and some documents. Panchnama exhibit P-1, in respect of this search, was prepared by respondent No. 3 and signed by the two Panch witnesses and the petitioner. The list of the documents seized by respondent No. 3 is contained in exhibits P-2 and P-3. The list of cash and jewellery found from the premises is given in exhibit P-4.
7. At about 5 p.m. on the same day, respondent No. 2 came to the premises when the money, gold ornaments and silver utensils had all been placed in the bed room. The raiding party asked him whether they should seize any money or not. He ordered that a sum of Rs. 10,000 out of Rs. 14,070 belonging to the. petitioner be seized. When the petitioner objected that the sum of Rs. 14,070 was a small amount and did not represent any undisclosed income, respondent No. 2 remarked that Rs 10,000 had to be seized as per instructions.
8. On October 24, 1974,
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