- (1.) BY this petition under Article 226 of the Constitution of India, the petitioners pray for quashing the authority letter under which the income-tax authorities conducted a search on the premises of petitioner No. 1, Lajpat Rai. The petitioners further pray for a writ of mandamus commanding the respondents not to operate the locker belonging to the petitioners and not to seize or take away the ornaments kept therein. It is further prayed that the respondents be directed to return the bill books and other papers seized from petitioner No. 1 and be restrained from making any assessment against petitioner No. 1.
(2.) PETITIONER No. 2, Smt. Suman Lata, is the wife of petitioner No. 1, Lajpat Rai. PETITIONER No. 3, Smt. Sukho Kunwar, is the mother of petitioner No. 1 and petitioner No. 4 is his sister. It is alleged that the eldest sister of petitioner No. 1, namely, Smt. Mukul Rani Varshani, was married to Sri Prem Chandra Varshani, who was the managing director of Saraikela Glass Works Ltd., Kandra, Bihar. The said Prem Chandra Varshani died about two years back and on his death his younger brother, Subhash Chandra Varshani, took over as the managing director of the said company. The income-tax authorities conducted a search on February 2, 1989, at the business and residential premises of Subhash Chandra Varshani at Kandra, Calcutta, Madras and Baroda and also at his other sales and business premises in different parts of the country. In that connection, the income-tax authorities also raided the residential premises of petitioners Nos. 1, 2 and 3 on February 2, 1989, along with a large number of Income-tax Officers, inspectors and police force. The team was headed by Sri V.K. Pandey, Director of Investigation, Allahabad, who informed petitioner No. 1 that the search was directed against him in connection with the search against the said Subhash Chandra Varshani, the managing director of Saraikela Glass Works. It is contended that after the death of his sister's husband, the petitioners are remotely connected with Subhash Chandra Varshani and there was no reason for searching the premises of the petitioners. Since the search party had come with a large force and the petitioners had nothing to hide from them, he allowed them to conduct the search of his premises. During the search, no appreciable properties were found and the raiding party took away some files, bill books connected with the business of petitioner No. 1 of supplying silica sand. The search party also took into its possession the key of locker No. 62 standing at the Allahabad Bank, Katra Branch, Allahabad. It is alleged that the said locker was initially taken by petitioner No. 3, Smt. Sukho Kunwar, the mother of petitioner No. 1 and it was later transferred in the name of petitioner No. 1. The said locker contained the ornaments of petitioners Nos. 2, 3 and 4. By a notice dated February 15, 1989, respondent No. 2 directed petitioner No. 2 to report at the former's office on February 16, 1989, in connection with the operation of the said locker. Petitioner No. 1 applied for adjournment on the ground of illness and in the meantime filed the present writ petition. It is contended that the said search is contrary to the provisions of Section 132 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), because the authorities had no reason to believe in consequence of information in their possession that petitioner No. 1 was in possession of any assets belonging to Subhash Chandra Varshani. It is also alleged that no search warrant was issued and none shown or served on petitioner No. 1 either on February 2, 1989, or thereafter. It is claimed that there was total non-application of mind by respondent No. 3, the Deputy Director of Income-tax (Investigation), as there was no material before him justifying the search. It is claimed that the petitioner had come to know that the authority letter allegedly carried by the raiding party was not signed by any of the authorities mentioned under Section 132 of the Act.
(3.) IN the counter-affidavit filed on behalf of the respondents and sworn by Sri T.P. Singh, Assistant Director of INcome-tax (INvestigation), it has been stated that petitioner No. 1 was related with Saraikela Glass Works Ltd., Kandra, as he was supplying silica sand to the said company. According to the respondents, Mrs. Mukul Rani Varshani is also a director of the said company. As already stated, according to the petition, she is the sister of petitioner No. 1. It is admitted in the counter-affidavit that Subhash Chandra Varshani aforesaid was the managing director of the said company. During the search conducted at the business and residential premises of Subhash Chandra Varshani and Saraikela Glass Works Ltd., the documents connected with the business transaction between the said company and Hanuman Minerals, proprietary business of petitioner No. 1, were found and seized. Therefore, it is incorrect to say that nothing connected with the petitioner was found during the aforesaid search. It is contended that the search and seizure operations against the petitioners were justified in so far as the concerned authorities had reason to believe that assets and valuables and/or documents connected with the transaction with Saraikela Glass Works Ltd. will be found in the said premises. The search and seizure operations were strictly conducted in accordance with Section 132 of the Act and Rule 112 of the INcome-tax Rules, 1962. It is also alleged that the search party had the necessary authorisation in their possession at the time of the search and the same was shown to petitioner No. 1, who had signed it. It is contended that during the search at the premises of petitioner No. 1 incriminating documents were found and seized from petitioner No. 1 which shows that petitioner No. 1 was having a true business connection with Saraikela Glass Works Ltd. It was on the basis of prior information to that effect the residential premises of petitioner No. 1 were searched. It is also contended that during the search petitioner No. 1 did not put up any protest or objection. It is contended that the locker is in the name of petitioner No. 1 only. It is contended that without opening the locker it cannot he said what it actually contains and whether the seizure of the ornaments allegedly kept therein would be justified. In the rejoinder affidavit sworn by petitioner No. 1, it has been admitted that he was supplying silica sand to the said Saraikela Glass Works Ltd., Kandra. It is reported that no warrant of authorisation was shown to petitioner No. 1.;