http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5

PETITIONER:

DR. KARAN SINGH

Vs.

RESPONDENT:

STATE OF JAMMU & KASHMIR & ANR.

DATE OF JUDGMENT20/12/1985

BENCH:

TULZAPURKAR, V.D.

BENCH:

TULZAPURKAR, V.D.

PATHAK, R.S.

CITATION:

1986 AIR 585 1985 SCR Supl. (3)1069

1986 SCC (1) 541 1985 SCALE (2)1467

ACT:

Wealth Tax Act, 1957, s.5(1)(xiv) - Claim for exemption

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 application for inspection - Refusal

of inspection by High Court - Validity of - Necessity for

inspection indicated.

HEADNOTE:

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.5(1)(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.

Being aggrieved, the appellant appealed to this Court.

The appeal was opposed by counsel for the Respondents on the

grounds (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 Constitution.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5

1070

Allowing the appeal,

^

HELD: 1(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 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 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]

(ii) The relevance and necessity of such inspection 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-C]

2. Questions 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 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 necessarily 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-H; 1073 A]

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5720 of

1985.

From the Judgment and Order dated 20.7.1985 of the J. &

K. 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.

1071

B. Datta, Additional Solicitor General, Gauri Shankar

S.N. Kacker, R.N. Poddar, Ms. A. Subhashini, M. Beg, E.C.

Agarwala, Z.A. Shah, Pradeep Bakshi and Lalit Gupta for the

Respondents.

The Order of the Court was delivered by

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5

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

inspection 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 Finance, 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

Director National Museum and Approved Valuers of jewellery

and others for that purpose. Even then the prayer for such

inspection was rejected.

The relevance and necessity of such inspection in the

context of the two matters that are pending before the

Government 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 inspection sought by the appellant.

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 Maharaja Hari Singh and Government of India

no such claim was made and that under Art. 363(1) of the

Constitution neith Government/Merger agreement nor any

dispute or obligation arising therefrom is justiciable and

therefore the 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. Questions of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5

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.5(1)(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, 1979-80, 1980-81 assessment

orders under the Wealth Tax Act have

1073

been passed by the Wealth Tax Officer, A Ward, Jammu wherein

the 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 portion in each of the assessment

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 CBDT has

not given 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

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

Toshakhana under the lock and seal of the Commissioner of

the High Court shall be opened for the purposes of

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 the true nature and character of the same and

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 representative of the

State Government but such representatives shall not work on

the panel of the Inspection Committee but 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

1074

Court within three months from the commencement thereof. The

parties are directed to obtain further directions in the

matter of such inspection from the High Court.

Appeal is allowed. No costs.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5

M.L.A. Appeal allowed.

1075