M.C. Agrawal, J. - (1.) BY this petition under article 226 of the Constitution of India, the petitioner prays for the following reliefs : "(i) issue a writ, order or direction in the nature of certiorari and to quash the impugned order dated September 29, 1997, passed by respondent No. 1 (annexure-16 to the writ petition) ; (ii) issue a writ, order or direction in the nature of mandamus commanding respondent No. 1 to forthwith release the jewellery seized from locker No. 47-A, New Bank of India, Unnao, on August 6, 1986 (details contained in annexure-1 to the writ petition) and the two N. S. Cs. Nos. 092455 and 092456 of Rs. 5,000 each ; (iii) issue a writ, order or direction commanding the respondents to compensate the petitioner to the tune of Rs. 20,000 for the loss caused by illegally detaining the N. S. Cs. for a period of more than five years ; (iv) issue a writ, order or direction commanding the respondents to compensate the petitioner for mental agony and harassment caused solely on account of grossly illegal acts of the said respondents and its officers for no fault of the petitioner, such compensation being not less than Rs. 50,000."
(2.) THE petitioner's case is that during the period July 25, 1986, to August 6, 1986, a search and seizure operation was carried out by the income-tax authorities at the residential premises of the petitioner and her husband, Sri Kripa Shanker Sengar. During the course of the said search several items of property were seized. Amongst them were two National Savings Certificates bearing Nos. 092455 and 092456 of Rs. 5,000 each that were purchased by the petitioner on March 5, 1986. THE petitioner claimed the same belong to her and have been found to belong to her. In addition jewellery valued at Rs. 1,74,788 was also seized which the petitioner claimed to belong to her and was held to be so. THE petitioner's case is that her assessments for the relevant assessment years, i.e., 1986-87 and 1987-88 were settled on March 27, 1989 and March 28, 1989 respectively. THE assessment for the assessment year 1986-87 dealt with the National Savings Certificates while the assessment for the assessment year 1987-88 dealt with the jewellery. She claims that the resultant demand for the two years has been paid off and yet the aforesaid items of her property have not been returned. The petitioner had earlier come to this court in Writ Petition No. 312 of 1997 seeking release of the aforesaid properties and this court quashed a non-speaking order dated January 15, 1996, passed by the Commissioner of Income-tax, Kanpur, and directed him to pass a fresh speaking order after affording an opportunity of hearing to the petitioner. In compliance with the said order of this court, the Commissioner passed an order dated September 29, 1997, which is the subject of the present writ petition. The Commissioner has again rejected the petitioner's claim for the return of the said properties on the ground that there were income-tax liabilities amounting to Rs. 1,34,248 and interest under Section 220(2) in respect of the petitioner's husband, Sri K. S. Sengar, who had died and from whom the petitioner inherited property No. 655-A, A. B. Nagar, Unnao, and, therefore, as a legal representative of the deceased, Sri K. S. Sengar, the petitioner is liable to pay the aforesaid dues and, therefore, the aforesaid items of property cannot be released. The learned Commissioner further observed that the Department can realise the outstanding taxes of Shri K. S. Sengar from Smt. Shobha Sengar (the petitioner) even by selling immovable assets which are under the possession of the petitioner. We have heard Sri S. D. Singh, learned counsel for the petitioner, and Sri Ashok Kumar, learned standing counsel for the respondents.
(3.) THE contention on behalf of the petitioner is that the property in question having been seized during a search and seizure operation against her, the same has to be dealt with in terms of the provisions of Section 132(5) and Section 132B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and that since the dues assessed on the petitioner had already been cleared the property had to be returned to her and their retention by the respondents is illegal. THE case of the respondents, on the other hand, is what has been stated in the Commissioner's order under challenge and reliance is placed on the provisions of Section 159 of the Act which deals with the liability of a legal representative. Before proceeding further it would be appropriate to reproduce the relevant provisions of the Act on a consideration of which the answer to the controversy between the parties would depend. Sub-sections (5) and (6) of Section 132 of the Act reads as under : "(5) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in Sections 132A and 132B referred to as the assets) is seized under Sub-section (1) or Sub-section (1A), as a result of a search initiated or requisition made before the 1st day of July, 1995, the Income-tax Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the previous approval of the Joint Commissioner,-- (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him ; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922). or this Act ; (iia) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment ; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in Clause (a) of Sub-section (1) of Section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in Clauses (ii), (iia) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized : Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets Were seized and may also determine the interest or penalty, if any, payable or imposable accordingly : Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in Clauses (ii), (iia) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of the Chief Commissioner or Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case. (6) The assets retained under Sub-section (5) may be dealt with in accordance with the provisions of Section 132B". ;