The existence of relevant material for taking action under Section 132 of the Income-tax Act, 1961 is a condition precedent for the exercise of power.

K.P.Bhandari, J.

1. This judgment will dispose of Civil Writ Petitions Nos. 2734, 2743, 2736 and 2735 of 1992 because all these writ petitions arise out of the same action of the income-tax authorities.

2. Action has been taken against the petitioners on the basis of a complaint received by the Assistant Director of Income-tax. On the basis of the complaint, the Assistant Director of Income-tax (Inv.), Ludhiana, recorded a note dated January 20, 1992, suggesting that action under Section 132 of the Income-tax Act, 1961 (for short, "the Act"), may be taken. This note was put up before the Deputy Director of Income-tax (Inv.), Chandigarh, who on January 21, 1992, agreed with the note of the Assistant Director of Income-tax suggesting action under Section 132 of the Act and forwarded it to the Director of Income-tax. Thereupon, the Director of Income-tax agreed with it and passed the necessary orders on January 24, 1992, and warrants of authorisation were issued under Section 132 of the Act.

3. The primary challenge in the writ petition to the action taken under Section 132 of the Act is based on the ground that there was no material before the concerned authority for taking action under Section 132 of the Act. The action of the respondents under Section 132 of the Act is wholly arbitrary, unreasonable and capricious. The respondents have filed written statement and have justified the action taken by them.

4. Mr. H.L. Sibal, senior advocate, for the petitioners, submitted that there was no material before the competent authority for taking action under Section 132 of the Act. He further submitted that the tankers which were alleged to be the property of the petitioner were lying usually parked at the petrol pump. These were not concealed goods. For this reason, no action under Section 132 of the Act is called for for taking the tankers in possession. He also submitted that the action of the respondent authority being contrary to the provisions of Section 132 of the Act is arbitrary, unreasonable and capricious and is, therefore, violative of Article 14 of the Constitution.

5. Mr. R.P. Sawhney, standing counsel for the Board of Revenue, contended that the action of the respondents is in conformity with the power conferred on the Department under Section 132 of the Act. Mr. R.P. Sawhney strongly contended that in order to determine the legality and validity of the action taken by the respondents against the petitioners, the court cannot go into the question of sufficiency of the material before the authority.

6. In order to determine the legality and validity of the action taken in the present case, it is necessary to consider the provisions of Section 132 of the Act. The provisions of Section 132 of the Act read as under :

"132. Search and seizure.--(I) Where the Director-General or Director or the Chief Commissioner or Commissioner or any such Deputy Director or Deputy 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 (11 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 142 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 (11 of 1922), or under this Act, or

(c) any person is in possession of any money, bullion, jewellery or other valuable a