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search and seizure

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NDPS Act = Search and seizer is a mandatory under sec.42 and sec.50 = Balbir singh principle – Gurjant Singh @ Janta …. Appellant VERSUS State of Punjab …. Respondent = http://judis.nic.in/supremecourt/imgst.aspx?filename=40907

NDPS Act = Search and seizer is a mandatory under sec.42 and     sec.50 =  but when police officer himself summoned DSP who is an acting DSP with out DSP rank then the Balbir singh principle not apply   Lower court and High court committed grave error – Apex court set aside =   Balbir … Continue reading

Passport Act, 1967: s.10(3)(e) – Impounding of passport of – NRI – FIR against – During search operation, passport seized – Retained by CBI under orders of Court – HELD: Retention of passport by CBI is clearly illegal as it has not been done in conformity with provisions of law and there is no order of the passport authorities u/s 10(3)(e) or by Central Government u/s 10-A to impound passport – Passport could not have been impounded except by passport authority in accordance with law – Passport Act being a specific one and s.104 Cr.P.C. being a general provision, by necessary implication power of court to impound any document or thing produced before it would exclude passport – Expressions `seizure’ and `impounding’ – Connotation of – Code of Criminal Procedure, 1973 – ss.102 and 104 – Interpretation of Statutes. Code of Criminal Procedure, 1973: s.102 – Seizure of document by police – HELD: Police may have power to seize a passport, it does not have power to retain or impound the same because that can only be done by passport authority u/s 10(3) of the Passport Act – If police seizes a passport u/s 102 of Code, it must send the same along with a letter to passport authority stating as to why seized passport deserves to be impounded u/s 10 of Passport Act – It is then for passport authority to decide whether to impound the passport or not – Passport to be returned to the owner – Passport Act, 1967 – ss. 10(3)(E) AND 10-A. Words and Phrases: Expressions `seizure’ and `impounding’ – Connotation of in the context of Passport Act, 1967 and Cr. P.C. Satwant Singh Sawhney Vs. D. Ramarathnam, Asstt. Passport Officer (1967) 3 SCR 525; Maneka Gandhi Vs. Union of India and another (1978) 1 SCC 248; Dam Valaji Shah & another Vs. L.I.C. of India & others AIR 1966 SC 135; Gobind Sugar Mills Ltd. Vs. State of Bihar & others 1999(7) SCC 76; and Belsund Sugar Co. Ltd. Vs. State of Bihar and others AIR 1999 SC 3125; and State of Orissa Vs. Binapani Dei AIR 1967 SC 1269 – referred to. Law Lexicon by P. Ramanatha Aiyar (2nd Edition); and Principles of Statutory Interpretation by G.P. Singh (9th Edition) – referred to. Harish N. Salve, Sidharth Luthra, Mukul Rohtagi, Sandeep Kapur, Ruchin Midha, R.N. Karanjawala and Manik Karanjawala for the Appellant. A. Sharan, A.S.G., A. Mariarputham and B. Krishna Prasad for the Respondent. =2008 AIR 1414, 2008(1 )SCR1212, 2008(3 )SCC674 , 2008(2 )SCALE46 , 2008(2 )JT174

CASE NO.: Appeal (crl.) 179 of 2008 PETITIONER: SURESH NANDA RESPONDENT: C.B.I. DATE OF JUDGMENT: 24/01/2008 BENCH: P.P. NAOLEKAR & MARKANDEY KATJU JUDGMENT: JUDGMENT O R D E R [ ARISING OUT OF S.L.P.(CRL.) 3408 OF 2007 ] 1. Leave granted. 2. The appellant claims to be a non-resident Indian settled in United Kingdom for … Continue reading

Voluntary Disclosure of the Income Scheme, 1997 : s.64(2)-Revocation of certificate-Search and seizure action against partners of firm-Income Tax authorities having already discovered assets declared in VIDS by assessee firm-Fact of search not disclosed in VIDS application-Certificate declared null and void-Writ Petition dismissed by High Court -Held: Though under Income Tax Act and VIDS, 1997 a firm and its partner may have to be treated differently, a firm is the conglomeration of its partners, and it is not a juristic person-On facts, disclosure made by firm related to some amount which had been disclosed by partner during search and seizure action-Even source of income was found to be the same-As income of firm vis-a-vis its partners have a direct correlation, while construing a statute granting immunity it should not be construed in such a manner so as to frustrate its object-Keeping in view the purport and object of 1997 Scheme, rule of purposive construction should be applied-Applying the principles underlying Article 136 and 142 of the Constitution, and having regard to nature of fraud practiced upon statutory authorities, no case made out for invoking jurisdiction under Article 136-Constitution of India, 1950-Arts. 136 and 142-Income Tax Act, 1961-Partnership Act, 1831-s. 19-Interpretation of Statutes-Purposive construction Interpretation of Statutes : Tax statutes-Circulars issued by Central Board of Direct Taxes-Held: May also be taken into consideration for purpose of construing the statute-Executive construction is ordinarily allowed to prevail and shall be binding on authorities under I.T. Act. Appellant-assessee, a partnership firm, made a voluntary disclosure, under the Voluntary Disclosure of the Income Scheme, 1997. The said declaration was accepted and a certificate was issued. However, by order dated 8.4.2003, the Commissioner of Income Tax declared the said certificate to be null and void u/s 64(2) of the Scheme, as the search and seizure action had been carried out in respect of the partners of the assessee relating to the assets declared by it in the VDIS application which had been discovered earlier by the Income Tax Department during the course of search and seizure action, but the assessee did not disclose this fact while filing the VDIS declaration. The writ petition filed by the assessee firm having been dismissed by the High Court, the firm filed the instant appeal. It was, inter alia, contended for the assessee-appellant that the firm for the purpose of applicability of provision of Income Tax Act being a distinct and separate entity vis-a-vis its partners, and there being no search and seizure of the premises of the firm, nor any warrant having been issued, the proceedings could not have been initiated for revoking the certificate issued under the VDI Scheme. =Dismissing the appeal, the Court HELD : 1.1. For the purpose of the application of the provisions of the Income Tax Act, 1961 and the Voluntary Disclosure of Income Scheme, 1997, a firm and its partner may have to be treated differently as a partner of a firm may have income other than his share of profits from the firm. [Para 17] [243-E] 1.2. It is, however, also well settled that fraud vitiates all solemn acts. Fraudulent actions shall render the act a nullity. It would be non est in the eyes of law. Acts of a firm vis-a-vis its partners, however, as is understood in common parlance or in terms of the provisions of the Partnership Act, 1932, in a case of this nature, may have to be taken into consideration for judging the validity of action. Under the Partnership Act, a partner represents a firm. He has an implied authority in terms of Section 19 thereof and thus, any action taken by a partner of a firm vis-a-vis. the firm, unless otherwise specific, binds the firm itself. It is one thing to say that for the purpose of invoking the provisions of the Income Tax Act and other taxation laws a firm and its partners are treated to be separate entities but while construing a statute involving immunity from certain penal actions, the provisions thereof should not ordinarily be judged on the touchstone of the provisions of the 1961 Act, only because the 1997 Scheme has a direct nexus therewith. The immunity granted pursuant to acceptance of a declaration made under the voluntary taxation scheme or Kar Vivad Samadhan Scheme, 1998 does not lead to a total immunity. Immunity granted under the Scheme has its own limitations. The Scheme must be applied only in the event the conditions precedent laid down therefore are applicable. [Para 19 and 20] [243-G-H; 244-A-C] State, CBI v. Sashi Balasubramanian & Anr., [2006] 10 SCALE 541 and Alpesh Navinchandra Shah v. State of Maharashtra and Ors., [2007] 2 SCC 777, relied on 1.3. In the instant case, a raid was conducted in the premises of the firm. Search warrant might have been issued in the name of a partner of the firm. The partner made certain statements. The search revealed some undisclosed income. The firm has a separate legal entity, it could have made a declaration, but it was done in respect of the same amount regarding the partner of the firm made disclosures. It is one thing to say that when a firm has concealed income, each partner need not make a declaration but it would be another thing to say that when a search has been made on the premises of the firm and the books of accounts of the firm are inspected, on the strength of a search warrant issued in the name of one of the partners thereof, a declaration can be made by the firm so as to cover the loopholes. In a case of this nature where fraud is alleged one cannot be oblivious of the fact that each firm acts through its partner. [Para 21] [244-D-G] 1.4. A firm is the conglomeration of its partners, and is not a juristic person. In the instant case, the purported disclosure made by the firm relates to the same amount which has been disclosed by the partner. Even the source of income was found to be the same. As the income of a firm vis-a-vis its partners have a direct co-relation, while construing a statute granting immunity, it should not be construed in such a manner so as to frustrate its object. Keeping in view the purport and object which the 1997 Scheme seeks to achieve, in the place of literal interpretation, the rule of purposive construction should be applied. [Para 21] [244-H; 245-A-B] Bombay Dyeing and Mfg. Co. Ltd. v. Bombay Environmental Action Group and Ors., [2006] 3 SCC 434 and National Insurance Co. Ltd. v. Laxmi Narain Dhut, [2007] 4 SCALE 36, relied on. Francis Bennion’s Statutory Interpretation, referred to. 2. Executive construction is ordinarily allowed to prevail and shall be binding on the authorities under the Act. A’ fortiori, clarificatory circulars issued by the Central Board of Direct Taxes may also be taken into consideration for the purpose of construction of the statute. [Para 18] [243-F] 3. In any event, it is not a fit case where this Court should invoke its extra-ordinary jurisdiction under Article 136 of the Constitution. It is now well settled that this Court does not exercise its jurisdiction only because it is lawful to do so. It, for the purpose of doing complete justice to the parties, not only may or may not interfere with the impugned judgment but also issue directions in terms of Article 142 of the Constitution. Applying these principles, and particularly having regard to the nature of fraud practiced upon the statutory authorities, no case has been made out for invoking our jurisdiction under Article 136 of the Constitution. [Para 23 and 24] Vimal Chandra, S. Dave, Neelam Kalsi, S.N. Singh, Pallavi Divekar for the Appellant. Amarjit Singh, Vikas Singh, ASGs., Neera Gupta and B.V. Balaram Das for the Respondents.

CASE NO.: Appeal (civil) 2696 of 2007 PETITIONER: Tanna and Modi RESPONDENT: C.I.T. Mumbai XXV and Ors. DATE OF JUDGMENT: 17/05/2007 BENCH: S.B. Sinha & P.K. Balasubramanyan JUDGMENT: JUDGMENT S.B. SINHA, J. 1. Leave granted. 2. Interpretation and application of the provisions of Voluntary Disclosure of Income Scheme falls for our consideration in this appeal … Continue reading

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