DR. KARAN SINGHversusSTATE OF JAMMU & KASHMIR & ANR.

                                                                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     D
    were kept under lock and seal of the Commissioner appointed by
    the High Court. The petition was the result of two matters pend-
    ing 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   E
    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      F
    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   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]

          (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
D   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
            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.
H
          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

           TULZAPURKAR, J.   Leave granted.                               B

          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           c
     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        D
     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."       E

       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     F
     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       G
     from the Ministry of F'inance, Central Board of· Direct Taxes,
     particularly the former wherein, in the context of the appel-
     lant'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,           H
    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.

         The relevance and necessity of such inspection in the
    context of the two matters that are pending before the Goverrnnent
B   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
c   will be served by the inapection 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
D   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-
E   tion neith Covenant/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. Q.iestions of maintainability of the writ petition and
F   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
G   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,       ,-
H   1979-80, 1980-81 assessment orders under the Wealth Tax Act have
                 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 accomp-
   anied 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
    1074                SUPREME COUKT RllPORTS   [1985] SUPP. 3 s.c.R.

A
    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.




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