B. N. KIRPAL, ( 1 ) THE challenge in this writ petition is to the search and seizure which was effected at the premises of the petitioners under the provisions of Section 132 of the Income Tax Act, 1961 and to the continuation of the order under Section 132 (3) in respect to the property, materials and stocks which were in existence at the time of the search of the petitioner s premises. ( 2 ) PETITIONER No. 1 is stated to be an individual carrying on business of dealing in handicraft items at premises No. B-55. Greater Kailash-I New Delhi. Petitioner No. 2 is a partnership firm carrying on business under the name and style of M/s. Sundaram. ( 3 ) ON 11th February, 1991, pursuant to an authorisation which was issued by the Director (Investigation), the aforesaid premises were searched. During the course of the search, the respondents found a number of articles which, according to the respondents, included some articles which were antique pieces. No seizure was effected but the respondents purported to pass an order under Section 132 (3) of the Act restraining the petitioners us well as the partners of the firm and their family members from operating or removing or dealing with the stock or other valuable articles or things lying in the premises. The entire room in which the stocks were lying, was sealed and restraint orders were passed against some saving bank accounts. ( 4 ) ON 9th April, 1991, the Assistant Director of Income Tax, who had originally passed the restraint order under Section 132 (3), lifted the restraint order dated 11th February, 1991 when the said premises were stated to have been visited by him. Thereafter fresh restraint order in respect of those very goods was paused on that very date viz. , 9th April, 1991. The premises were again visited by the respondents on 24th April, 1991 and on that date also the respondents repeated the exercise of first revoking the restraint order and then passing a fresh one on that very day. Again on 6th June, 1991 the premises of the petitioners were visited by the officers of the respondents. The restraint order which had been passed under Section 132 (3) was revoked and thereafter another restraint order was passed on 6th June, 1991. Again on 6th June, 1991 the premises of the petitioners were visited by the officers of the respondents. The restraint order which had been passed under Section 132 (3) was revoked and thereafter another restraint order was passed on 6th June, 1991. On 28th June, 1991, the Commissioner of Income Tax is stated to have passed orders granting extension of the restraint till 30th September, 1991. As of today, the restraint order is accordingly continuing. ( 5 ) THE challenge in the writ petition is firstly to the authorisation which was issued under Section 132 (1 ). The second challenge is to the continuation of the restraint orders. We shall deal with these two challenges separately. ( 6 ) AS regards the action under Section 132 (1), it has been stated by the respondents that there was reason to believe and information had been received, that the petitioners were indulging in the purchase and sale of antique items of handicrafts in which huge sums of money were invested and these antique items had not been disclosed enter to the Income Tax Department or to the Department of Antiquities. It is further averred that during the course of search some officers of the Department of Archaeology were present and a large number of items, which were prima facie considered to be of antique value, were found. The respondents have also stated in their affidavit in reply that the books of accounts showed that the petitioners were holding stocks which were not truly and. properly reflected in their books. In other words, the respondents have sought to justify the action which they have taken under Section 132 (1 ). ( 7 ) IN view of the averments made by the respondents, which we have no reason to disbelieve, it appears that prima facie there were stocks which were found at the premises of the petitioners which certainly required an explanation with reward to the value and the source of acquisition, It cannot be said, in the present case, that there was no justification for the action which was taken by the respondents in issuing an authorisation undersection 132 (1 ). It was possible that ultimately as and when, the goods are investigated in greater detail and an assessment order is passed, the petitioners may be in a position to explain the whole or any of the doubts of the respondents. It was possible that ultimately as and when, the goods are investigated in greater detail and an assessment order is passed, the petitioners may be in a position to explain the whole or any of the doubts of the respondents. By that as it may, as at present advised, we are unable to come to the conciusion that the action of the respondents in conducting the search, was unjustified. ( 8 ) AS has already been noted, the stock which was found at the residence of the petitoners was not seized. The respondents have passed successive orders under Section 162 (3 ). The question is whether this is valid. Before going into the validity of the action in the present case, it will be necessary to refer to the relevant provisions of the Act. ( 9 ) A search is conducted pursuant to an authorisation issuer under Section 132 (1) of the Act after the empowered officer has reason to believe that any of the conditions specified in subclause (a), (b) or (c) or sub-section (1) of Section 132 exist. When the search is conducted the authorised officer is, inter alia, empowered to seize any books of accounts, documents, money, bullion, jewellery or other valuable articles or things which are found as a result of such search. With effect from 1stapril 1989, second proviso to Section 132 (1) was inserted which reads as follows "provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characterisities or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with It, except with the previous permission of such authorised officer and such action oft the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii ). " ( 10 ) SUB-SECTION (3) of Section 132 also gives power to an authorised officer to pass an order of restraint. " ( 10 ) SUB-SECTION (3) of Section 132 also gives power to an authorised officer to pass an order of restraint. Toe said subsection (3) reads as follows : "the authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable articles or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. " ( 11 ) THE other relevant provision of Section 132 is sub-Section (5) which enables an Income Tax Officer to pass an order within 120 days of the secure, estimating the undisclosed income. calculating the amount of tax and then inter alia retaining in his custody, the assets which in his opinion would be sufficient to satisfy the amount of tax payable by the assessee. Against an order passed under sub-Section (5), a right of appeal is granted under sub-Section 11. Where no seizure is effected and merely a restraint order is passed under sub-section (3), then sub-Section (8) of Section 132 enables the authorised officer to retain the books of accounts and other documents for a period exceeding 180 days only after getting approval of the Chief Commissioner or the Commissioner for such retention. With effect from 1st April. 1989 sub-Section (8a) was inserted which authorised the extension of an order passed under sub-Section (3) of Section 132 beyond the period of 60 days with the approval of the Commissioner of Income Tax. Against an order passed under sub-Section (8a) no appeal is provided though an appeal is provided under sub-Section (10) against an approval granted by the Commissioner under Section 132 (B) ( 12 ) THE effect of the aforesaid provisions is that if seizure is effected then an order has to be passed under Section 132 (5) for the seized goods. Against an order passed under sub-Section (8a) no appeal is provided though an appeal is provided under sub-Section (10) against an approval granted by the Commissioner under Section 132 (B) ( 12 ) THE effect of the aforesaid provisions is that if seizure is effected then an order has to be passed under Section 132 (5) for the seized goods. If seizure is not effected but an order of restrunt under Section 132 (3) is issued, then such restraint order can be continued by invoking the provisions of Sub-Section (8a), in the case of books of accounts and all the other articles which are the subject matter of such an order. ( 13 ) THE right of filing an appeal is not granted if a restraint order is merely continued. ( 14 ) READING the second proviso to Section 132 (1) and subsection (3) of Section 132 it appears that the Legislature w. e. f. 1st April, 1989 has regarded certain orders of restraint as amounting to an order for seizure. Phraseology of the two provisions is somewhat identical. Sub-section (3) of Section 132 enables the authorised officer to pass a restraint order where it is "not practicable to seize" any such books of accounts, documents, valuable articles etc. The second proviso to Section 132 (1) also talks of a case where it is not practicable to take physical possession of a valuable article or thing and in which case an order of restraint may be issued but the second proviso would come into play only where it is not practicable to take physical possession of the valuable article for any of the four reasons viz. , due to its volume or weight or other physical characteristics or due to its being of a dangerous nature. To put it differently, if any of these four reasons exists, then the authorised officer need not take physical possession of the articles but can pass a restraint order but such a restraint older will be deemed to be a seizure of such valuable articles. Physical possession is not taken because it is not practicable. To put it differently, if any of these four reasons exists, then the authorised officer need not take physical possession of the articles but can pass a restraint order but such a restraint older will be deemed to be a seizure of such valuable articles. Physical possession is not taken because it is not practicable. If it is not practicable to take physical possession of a valuable article for any reason other than that provided in the second proviso to Section 132 (1), then the provisions of Section 132 (3) can be validly invoked, e. g. books of accounts or valuable articles which are liable to be seized, may be under a lock and it may not be possible to get the physical possession of the same because the key may not be available. Another example can be where key of a locker is recovered but the locker cannot be opened for any reason and it may be suspected that the said locker would contain articles which are liable to be seized. There can be a large number of reasons which make it impracticable to seize documents and valuable things. The word "practicable" indicates that for some good and valid reason it is not possible, to seize the valuable articles or the books of accounts. Sub-Section (3) of Section 132 would apply only in those cases where the second proviso to Section 132 (1) does not apply. Where it is not practicable to seize the account books and valuable articles for the reason stated in the second proviso to Section 132 (1), a restraint order would be regarded as a deemed seizure but where it is not practicable to do so for any other reason, then a restraint order will be regarded as having been validly passed under Section 132 (3) and the restraint order will continue till formal seizure is effected. ( 15 ) COMING to the facts of the present case we find that the restraint orders which have been issued under Section 132 (3), from time to time, suffer from two infirmities, firstly for the reasons stated in the reply affidavit, which are also borne out from Department s record, it cannot be said that it was not practicable, to effect seizure. In other words the conditions necessary for the exercise of the jurisdiction under Section 132 (3) did not exist. In other words the conditions necessary for the exercise of the jurisdiction under Section 132 (3) did not exist. Secondly we find that the restraint orders have been cancelled and renewed from time to time and in the present circumstances we do not think that this was validly done. ( 16 ) IN the affidavit in reply it has been stated that the stocks which were found in the premises were not seized because the petitioners had not been able to explain the existence of the stocks by any documentary evidence. It was further stated that the petitioners had not come forward to identify the items of stock from the purchase vouchers and to give the value of the various items. It is the case of the respondents, while justifying the authorisation under Section 132 (1) that the entries of the books which were retained did not show the possession of the items of stock correctly. There were a large number of handicraft items, some of which were antique which the petitioners could not identify or co-relate with the purchase vouchers which were available with them. This may be a ground or good reason for effecting seizure but, in our opinion, it cannot be said that this is a valid ground for exercising jurisdiction under Section 132 (3 ). Section 132 (3) can be resorted to if there is any practical difficulty in seizing the item which is liable to be seized. If there is no practical difficulty then an authorised officer has the jurisdiction and duty to see the books of accounts, other documents, money, bullion, valuable articles etc. which are found as a result of the search, if no explanation is coming forward in respect thereof. Therefore, when the search was effected on 11th February, 1991 and the petitioners were unable to give any valid explanation as demanded by the respondents, then the only power which could have been. exercised or should have been exercised by the authorised officer was to effect seizure. It could not be said that because no explanation is being offered by the petitioners, thereafter, it is impracticable to effect seizure. When no explanation or unsatisfactory explanation is offered and valuble articles are found at the time of search, then the authorised officer would be fully justified in effecting seizure. It could not be said that because no explanation is being offered by the petitioners, thereafter, it is impracticable to effect seizure. When no explanation or unsatisfactory explanation is offered and valuble articles are found at the time of search, then the authorised officer would be fully justified in effecting seizure. Once a seizure is effected, the period of limitation starts and an order under sub-Section (5) of Section 132 has to be passed within the stipulated period. ( 17 ) IN our opinion, the power under Section 132 (3) cannot be so exercised as to circumvent the provisions of Section 132 (1) read with sub-section (5) thereof. When a search is conducted and valuable moveable articles are found, which are liable for seizure then they should be seized. Because such seizure was not being effected due to their physical characteristics, the Parliament thought it necessary to enact second prcviso to Section 132 (1 ). Whereas previously due to the weight, volume or physical characteristics, only restraint orders under Section 132 (3) were being passed, now w. e. f 1st April, 1989 such restraint orders are being regarded as deemed seizure under sub-clause (iii) of Section 132 (1 ). The intention of the Legislature is very clear viz. , it is the duty of the authorised officers to effect seizure wherever any valuable article or thing is found during the course of the search and the words "not practicable to seize" used in Section 132 (3) have to be under stood in this sense viz. , where there is practical difficulty in. effecting seizure, then an order under Section 132 (3) can be passed. Not knowing the value of the articles or whether they are antique or not cannot be regarded as a practical difficulty on the part of the authorised officer in effecting seizure. In our opinion, therefore, the orders which were issued under Section 132 (3) were not validly issued and the goods which were found at the premises could have been seized by actually seizing the articles or by making an order of restraint under 2nd proviso to Section 132 (1) of the Act This was not done in the present case. ( 18 ) WHENEVER there is a seizure of articles under Section 132 (1) including deemed seizure, an order under sub-section (5) has to be passed within 120 days of the seizure. ( 18 ) WHENEVER there is a seizure of articles under Section 132 (1) including deemed seizure, an order under sub-section (5) has to be passed within 120 days of the seizure. Where no such order is passed, the goods have to be released. The period of 120 days came to an end on or about 8th June, 1991. As no order under Section 132 (5) has been passed, the said goods are liable to be released. ( 19 ) THERE is another reason for ordering the release of the said goods even on the assumption that a valid order under Section 132 (3) was passed. Firstly when an order under Section. 132 (3) is issued, it must, in our opinion, be recorded as to why it is not practicable to effect seizure. This is for the reason. that whenever any such order is passed then the Commissioner can grant an extension under sub-Section (8a) of Section 132 after recording reasons in writing. In the present case we are informed that on 20th June, 1991 reasons were recorded by the Commissioner while granting extension. Be that as it may, we find that just prior to the expiry of 60 days of the order dated 11th February, 1991, the order under Section 132 (3) was revoked on 9th April, 1991 and a fresh order in respect to the same goods was again passed on 9th April, 1991. This exercise was repeated on 6th June, 1991. ( 20 ) IN our opinion, it is not permissible to do so. "the orders which are passed under Section 132 (3) may have a very far reaching effect on the business of an assessee. The order of restraint may adversely effect the business and, therefore, adequate safeguards are sought to be provided in the Act by the insertion of the provision of sub-Section (8a) in Section 132. In order that the restraint order must not be continued indefinitely, sub-Section (8a) of Section 132 provides that the restraint order can be continued only if, before the expiry of 60 days, and for reasons to be recorded, the Commissioner grants an extension. The provisions of sub-Section (8a) cannot be by-passed or rendered nugatory by revoking an order under Section 132 (3) and thereafter passing another order on the same date. " On 11th February, 1991, an order under Section 132 (3) had been passed. The provisions of sub-Section (8a) cannot be by-passed or rendered nugatory by revoking an order under Section 132 (3) and thereafter passing another order on the same date. " On 11th February, 1991, an order under Section 132 (3) had been passed. The 60 days would expire on or about 10th April, 1991. If the order under Section 132 (3) was to be continued then the Commissioner should have granted approval under sub-Section (8a ). What was done in the present case was to cancel the order dated 11th February, 1991 on 9th April, 1991 and then to pass a fresh order under Section 132 (3) on that very date. No approval of the Commissioner of Income-Tax was sought. The same thing happened on 6th June, 1991. The order under Section 132 (3) was, in effect, extended twice without any concurrence from the Commissioner of Income Tax and merely on the Assistant Director of Income-Tax deciding to revoke the order and passing a fresh order. The provisions of sub-Section (8a) of Section 132 were thereby circumvented. ( 21 ) IN our opinion, "once an order under Section 132 (3) has been passed then the limitation period commences and such order cannot be continued unless and until the provisions of Section 132 (8a) are satisfied. " ( 22 ) IT has been contended by learned counsel for the respondents that on 9th April, 1991 and 6th June, 1991 the earlier orders of restraint were revoked because the Department officials alongwith the officials of the Archaeology Department wanted to inspect the goods. In our opinion, even when an order under Section 132 (3) has been passed, the Department officials are not restrained from examining the goods. "an order under Section 132 (3) restrains the owner or the person in the possession of the goods from removing, parting with possession or dealing with them. The order of restraint is effective against the owner or the person in possession thereof and is not aimed at the Department itself. By issuing an order under Section 132 (3), the Department is not restrained from examining the goods in respect of which a restraint order has been passed. " There was no valid reason, therefore, for seeking to revoke the orders on 9th April, 1991 and 6th June, 1991. By issuing an order under Section 132 (3), the Department is not restrained from examining the goods in respect of which a restraint order has been passed. " There was no valid reason, therefore, for seeking to revoke the orders on 9th April, 1991 and 6th June, 1991. Seeing the dates when such action was taken we find considerable force in the contention of the learned counsel for the petitioner that this device was resorted to solely with a view to circumvent the provisions of Section 132 (8a ). The first revocation was effected on 9th April, 1991 only about one or two days before the expiry of 60 days. Similarly the second revocation of 6th June, 1991 was also effected only on or about two days before the expiry of 60 days from 9th April, 1991. ( 23 ) WE are, therefore, of the opinion that the approval of the Commissioner of Income-Tax not having been obtained under Section 132 (8a), the continuation of the restraint order under Section 132 (3) even if it could be validly passed, was not warranted. ( 24 ) FOR the aforesaid reasons, this writ petition is partly allowed. While upholding the action of the respondents in issuing the authorisation under Section 132 (1) and Conducting the search, we quash the orders passed under Section 132 (3 ). The respondents are accordingly directed to release the aforesaid goods, articles or things after three weeks.