HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Gopaldas Udhavdas Ahuja and Anr. v. Union of India and Ors.
Civil Appeal No. 2335 of 1996
[2004] Supp. 2 S.C.R. 942 ·
Income-tax Act: sections 119 and then 132(5) · Gold (Control) Act: sections 64(b), 66, 71, 74, 85, 98B, 105 · Voluntary Disclosure scheme, 1975
Sources & disclosures includedDownload original judgment / order
Two-judge Bench · Ruma Pal J. · S.H. Kapadia J.
Assessment years: No assessment-year liability adjudicated
01 · Facts of the case
Income-tax officers recovered gold on 28 August 1974; Gold Control took it over on 30 August and issued notice on 20 September. A disclosure declaration followed on 27 December 1975. The appellants denied knowledge of the gold hidden in a cupboard cavity. Despite criminal acquittal, the Division Bench upheld confiscation and penalties, prompting this appeal.
Source: SCR 951-959 / PDF pp.10-18
02 · Discussion by the Hon’ble Court
Gold Control sections 64(b), 66 and 105 authorised the takeover on the recorded reasonable belief; the CBDT information circular bound tax officers under section 119. The then section 132(5) assessment/recovery scheme differed, so Tarsem Kumar did not invalidate this seizure. Earlier lawful seizure and pending proceedings defeated disclosure immunity; later remand did not erase pendency. Yet inconsistent recovery evidence and the inaccessible vault failed to establish conscious possession. Acquittal on the same evidence reinforced that conclusion, without creating a rule that every acquittal automatically nullifies confiscation.
Source: Conscious possession: SCR 966-971 / PDF pp.25-30; Seizure and immunity: SCR 975-980 / PDF pp.34-39
03 · Judicial decision
The appeal was allowed and the Division Bench judgment set aside. The specified absolute confiscation and personal penalties were set aside. Undisposed gold was to be returned within two months of the Collector's receipt of the order; if already disposed of, the sale price was payable with 6% annual interest from disposal until payment. There was no order as to costs.
Source: SCR 980-981 / PDF pp.39-40
04 · Outcome / in whose favour
Appellants succeeded on confiscation and personal penalties, not on their challenge to seizure or their claim to voluntary-disclosure immunity. This was not a determination of an income-tax assessment or tax quantum.
05 · AKHB REVIEW POINT
AKHB analysis: Separate seizure authority, disclosure immunity and proof supporting confiscation. Reconstruct the seizure-notice-declaration chronology and inspect contemporaneous recovery records. Success on confiscation did not undo the adverse seizure/immunity holdings. This decision neither overrules Tarsem Kumar nor grants automatic immunity after acquittal. Today's inter-agency transfers require a separate statutory check.
Source: SCR 969-980 / PDF pp.28-39
Source & verification
Download original judgment / order · Open cited source rendition
All 40 pages read; headnotes SCR 942-951 distinguished from Kapadia J.'s judgment SCR 951-981. Report page pinpoints used.
- Relief covers the confiscated bars, brick, coins and sovereigns and personal penalties, not previously redeemed idols.
Statutory scope
Historical tax-search/disclosure companion, not an assessment decision. The then section 132(5) and the Gold (Control) Act (repealed in 1990, as the report notes) must not be applied as current law.
Later treatment
Source checked 2026-10-17. Judgment as delivered on 6 July 2004; subsequent treatment and present applicability unverified.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Identified source links
- reported judgment — PDF 40 pages
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AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from identified primary reports. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, operative order, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding. No current-law clearance is claimed.