1069
DR. KARAN SINGH A
v.
STATE OF JAMMU & l<ASHMIR & ANR.
qECEMBER 20, 1985
##### [v.o. TULZAPllRKAR AND R.S. PATHAK, JJ. J B
Wealth Tax Act, 1957, s.S(l)(xiv) - Claim for exempt.ion in
respect of jewellery and valuable articles of personal use lying
in Toshakhana - Assessee in wealth tax proceedings claiming
ownership - State contesting the claim - CBDT informing assessee
to arrange physical inspection - High Court approached with C
application for inspection - Refusal of inspection by High Court
- Validity of - Necessity for inspection indicated.
### •
The appellant filed a writ petition in the High Court
claiming ownership and title of six boxes containing jewellery
and other valuable articles lying in Srinagar Toshakhana. These
were kept under lock and seal of the Commissioner appointed by
the High Court. The petition was the result of two matters pending before the Government of India: (1) Whether the appellant was
the owner of the jewellery or other valuable articles of personal
use lying in those boxes on the ground that the properties are
heirlooms, and (ii) whether exemption in respect of such items of
properties as heirlooms under s.S(l)(xiv) of the Wealth Tax Act
in wealth tax assessment proceedings of the appellant as HUF was
available to him or not. Pursuant to a request and the suggestion
of the Central Board of Direct Taxes to have physical inspection
of the items in question by the Members (W.T.&J) alongwith
experts to establish whether the properties are heirlooms or not,
an application was accordingly moved before the High Court for
inspection of the jewellery and other articles. The High Court
dismissed the application on the ground that no useful purpose
will be served to grant inspection.
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Being aggrieved, the appellant appealed to this Court. The
appeal was opposed by counsel for the Respondents on the grounds G
(i} that the appellant's claim of ownership or title to these
items has been refuted in the counter-affidavit that had been
filed in the main Writ Petition where property has been claimed
to be State property; (2) that unless the appellant showed some
prima facie title to the property in question, inspection would
..., be premature and uncalled ·for, and (3) that the writ petition
itself was not maintainable· in view of Article 363 (1) of the H
Constitution.
1070 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R. "
A Allowing the appeal,
llKll>: l(i) The order dated July 20, 1985 is clearly
erroneous, and inspection sought ought to have been granted. The
six boxes containing the jewellery and other valuable articles
lying in Srinagar Toshakhana shall be opened for the purpose of
B inspection by the Member, Central Board of Direct Taxes (WT&J) who will be accompanied by the Director General of Archaelogical
Survey of India, Director Antiques, Director National Museum and
Approved Valuers of Jewellery for determining whether any and if
so what items constitute heirlooms or articles of personal use of
the appellant and his family. Such inspection will be taken in
the presence of the appellant's representative as also a
#### c representative of the State Government but such representatives
shall not work on the panel of the Inspection Committee but may
render assistance as may be necessary. [1073 E-G]
D
(ii) The relevance and necessity of such in~pection in the
instant case cannot be disputed. The main issue arising between
the parties is whether the jewellery and other valuable articles
of personal use contained in the six boxes lying in Srinagar
Toshakhana are heirlooms of the appellant and his family as
claimed by him or not. Such inspection by experts will
unquestionably facilitate its determination, [1072 B-<:]
2. Questions of maintainability of the writ petition and
E appellant's title to the property in question would undoubtedly •
##### be gone into at the final hearing of the writ petition but it
cannot be gainsaid that the inspection by experts will be useful
for determination of the appellant's title to the property. At
this · stage no one can proceed on the assumption that the
preliminary objection as regards maintainability will n~cessarily
F be upheld. Moreover, the assessment order for the 3 assessment
years, 1978-79, 1979-80 and 1980-81 though made on protective
basis and subject to final valuation of the assets, clearly show
that the Wealth Tax Authorities, and the CBDT are treating the ~
estate lying in the Srinagar Toshakhana as property belonging to
the appellant's family. [1072 F-R; 1073 A)
G
H
CIVIL APPELIATE JURISDICTION : Civil Appeal No. 5720 of
1985.
##### From the Judgment and Order dated 20.7.1985 of the J, & K, f'
High Court in CMP No. 645 of 1985 in W.P. No. 122 of 1983.
Soli J. Sorabjee, J.B. Dadachanji, F.H. Talyarkhan, S.P.
Gupta, Mrs. A.K. Verma and D.N. Mishra for the Appellant.
KARAN SINGH v. STATE [TULZAPURKAR, J.] 1071
B. Uatta, Additional Solicitor General, Gauri Shankar S.N. A
Kacker, R.N. Poddar, Ms. A. Subhashini, M. Beg, E.G. Agarwala,
##### z.A. Shah, Pradeep Bakshi and Lalit Gupta for the Respondents.
The Order of the Court was delivered by
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-,
TULZAPURKAR, J. Leave granted.
Heard Counsel for the parties as also for CBDT and Wealth
Tax Officer.
The short question raised in this appeal is whether
inspection of the jewellery and other valuable articles of
personal use contained in six boxes lying in Srinagar Toshakhana
- which boxes are at present kept under lock and seal of the
Commissioner appointed by the J & K High Court under its order
dated June 22, 1984 - was improperly declined by the learned
Single Judge by his order dated July 20, 1985 pending disposal of
the main writ petition no. 122 of 1984. The learned Judge has
rejected the appellant's prayer for inspection by observing thus:
"Be that as it may, at this stage without speculating
on the merits of the petition, I find that no useful
purpose will be served by granting relief to the
petitioner which he has prayed in the present CMP."
According to the appellant there were two matters before the
Government of India (i) whether the appellant was the owner of
the jewellery or other valuable articles of personal use lying in
those boxes on the ground that the properties are heirlooms and
(ii) whether exemption in respect of such items of properties as
heirlooms under s.5(1) (xiv) of the Wealth Tax Act in Wealth Tax
Assessment proceedings of the appellant as HUF was available to
**him** **or not** **and** **for** **both these· matters** **it** **was** **necessary** **to** **have** **an**
inspection of the items by experts to establish whether the
**properties** **are heirlooms** **or** **not.** **In** **fact** **the** **prayer** **for** **inspec-**
tion was made by him on the basis of two letters one dated 12th
of February 1985 and the other dated 13th of June, 1985 issued
**from** **the** **Ministry** **of** **F'inance,** **Central** **Board** **of·** **Direct** **Taxes,**
particularly the former wherein, in the context of the appellant's application for exemption under s.5(1) (xiv), it was
suggested by the CBDT that the appellant should arrange for the
physical inspection of the items in question by the Member (WT&J)
**who** **would** **be accompanied** **by** **some** **experts such as** **Director**
**General,** **Archaelogical** **Survey** **of** **India;** **Director Antiques,**
1072 SUPREME COURT REPORTS (1985] SUPP. 3 s.c.R. ~
A Director National Museum and Approved Valuers of jewellery and
others for that purpose. Even then the prayer for such inspection
was rejected.
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The relevance and necessity of such inspection in the
context of the two matters that are pending before the Goverrnnent
of India cannot be disputed, for, the main issue arising between
the parties is whether the jewellery and other valuable articles
of personal use contained in the six boxes lying in Srinagar
Toshakhana are heirlooms of the appellant and his family as
claimed by him or not and such inspection by experts will
unquestionably facilitate its determination. We, therefore, fail
to appreciate how the learned Judge felt that no useful purpose
will be served by the inapection sought by the appellant.
1979-80, 1980-81 assessment orders under the Wealth Tax Act have
Counsel for the Union of India as well as the learned
Advocate General of J & K appearing for the State strenuously
urged before us that the appellant's claim of ownership or title
to these items has been refuted in the counter affidavits that
have been filed in the main writ petition where the property has
been claimed to be State property and in this behalf reference
was also made to one of the preliminary objections raised by the
Union of India to the maintainability of the writ petition on the
ground that at the time of the settlement arrived at between the
acceding Ruler Maharaj a Had Singh and Government of India no
such claim was made and that under Art. 363(1) of the Constitu### obligation tion neith arising Covenant/Merger therefrom is agreement justiciable nor and any therefore dispute the or •
writ petition deserves to be dismissed. It was, therefore, urged
that unless the appellant shows some prima facie title to the
property in question inspection would be premature and uncalled
for. Q.iestions of maintainability of the writ petition and
appellant's title to the property in question would undoubtedly
##### be gone into at the final hearing of the writ petition but it
cannot be gain-said that the inspection by experts which will
have a bearing on the nature and character of the property in question will be useful for determination of the appellant's
title to the property in case the preliminary objection fails and
at this stage no one can proceed on the assumption that the ~·
preliminary objection will necessarily be upheld. But apart from .
this, on prima facie title, the claim for exemption under
s,S(l)(xiv) of the Wealth Tax Act (under both the limbs of the
provision) was pending before the Wealth Tax authorities and we
##### are now informed that for the three assessment years, 1978-79,,
KARAN SINGH v. STATE (TULZAPURKAR, J.] 1073
been passed by the Wealth Tax Officer, A Ward, Jammu wherein the A
estate belonging to the appellant's family lying in the Srinagar
Toshakhana has been valued at a considerably enhanced figure over
and above the value returned by the appellant in his returns, and
the exemption claimed by him under s.5(1) (xiv) of the Wealth Tax
Act in respect of the heirlooms has been declined and his estate
has been assessed. The relevant portionin each of the assessment B
- orders in this behalf runs thus:
"2. **The** **assessee** **has claimed exemption** **of** **this** **estate**
(estate lying in Srinagar Toshakhana) under s.5(1)
(xiv) of the W.T. Act, 1961. However, I have been
#### given to understand that the CB!lr has not given c
recognition to the claim of the assessee. Therefore,
**the** **estate** **is** **assessed."**
The appellant has challenged these assessment orders in appeals
which are pending. These assessment orders, though made on
protective basis and subject to the final valuation of the ~·
estates, clearly show that the Wealth Tax authorities, and the
CBDT, Revenue Department, Ministry of Finance, Government of
India are treating the estate lying in the Srinagar Toshakhana as
property belonging to the appellant's family.
### •
-,
Having regard to the aforesaid facts the impugned order E
dated July 20, 1985, in our view, is clearly erroneous and the
inspection sought ought to have been granted •
We, therefore, direct that the six boxes containing the
jewellery and other valuable articles lying in Srinagar
Toshakhans under the lock and seal of the Commissioner of the
High Court shall be opened for the purposes of inspection by the F
Member, Central Board of Direct Taxes (WT&J) who will be accompanied by the Director General' of Archaelogical Survey of India,
Director Antiques, Director National Museum and Approved Valuers
of jewellery for determining the true nature and character of the
•ame and whether any and if so what items constitute heirlooms or
articles of personal use of the appellant and his family. Such G
inspection will be taken in the presence of the appellant's
representative as also a representative of the State Government
but such representatives shall not work on the panel of the
Inspection Committee hut may render such assistance as may be
necessary to the members of the panel. The Inspection Committee
will complete the inspection and submit its report to the High
H
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A
1074 SUPREME COUKT RllPORTS [1985] SUPP. 3 s.c.R.
Court within three months from the commencement thereof. The
parties are directed to obtain further directiona in the mstter
of such inapection from the High Court.
Appeal is allowed. No costs.
Appeal allowed.
