Non-Compliance with VAT Rules Doesn’t Invalidate Jewellery Bills in Matrimonial Disputes: Kerala High Court Allows Recovery of Gold Ornaments

“Non-compliance with statutory invoice format under VAT law may invite tax penalties but does not render the document inadmissible in matrimonial litigation” —  In a judgment that finely balances evidentiary principles with matrimonial justice, the Kerala High Court on 3rd November 2025 ruled that failure to follow VAT Rules while issuing jewellery invoices will not render such documents inadmissible in proceedings for return of gold ornaments between estranged spouses. The Court also reaffirmed the Family Court’s power under Order VII Rule 7 of the Code of Civil Procedure to grant alternative relief based on market value, even where such relief was not explicitly claimed.

A Division Bench of Justice Sathish Ninan and Justice P. Krishna Kumar partly allowed an appeal and cross-objection filed by the husband and wife respectively arising from a Family Court decree ordering return of 52.955 sovereigns of gold or an equivalent monetary sum. The High Court modified the decree, directing the husband and his family to return 45 sovereigns or the market value on the date of actual recovery, without any interest.

“Marriage Photos, Invoices, and Oral Admissions Prove Possession of At Least 53 Sovereigns”

The dispute revolved around the wife’s claim that she had entrusted 65 sovereigns of gold ornaments to her husband and in-laws shortly after their marriage in 2008, of which 53 sovereigns were alleged to be given by her parents. She claimed the gold was later misappropriated by the husband’s family for constructing the upper floor of their house and for the marriage of the husband’s sister.

Though the Family Court had awarded 52.955 sovereigns, the High Court slightly modified the decree to 45 sovereigns, citing evidentiary gaps for the remaining ornaments.

The Court noted that:

“A mere perusal of Ext. A9 series of photographs clearly shows that the respondent was wearing more than 50 sovereigns of ornaments at the time of her marriage.”

Additionally, the husband's own shifting admissions — first denying possession beyond 10 sovereigns, then stating 20 sovereigns in chief, and finally suggesting 25–30 sovereigns in cross-examination — weakened the credibility of his defence. The Court found this inconsistency telling:

“The contentions raised by the appellants regarding the quantity of gold ornaments possessed by the wife at the time of marriage are wholly inconsistent.”

“VAT Invoice Irregularities Are No Ground to Reject Evidence in Matrimonial Cases”

The husband’s primary argument on appeal was that the jewellery invoices (Exts. A6–A8) submitted by the wife were inadmissible, as they violated Rule 58(10) of the Kerala VAT Rules, 2005, which mandates a prescribed format for such invoices. The jeweller (PW2) had admitted in cross-examination that his business was governed by the VAT Rules.

Rejecting this challenge, the Court observed:

“Non-compliance with the statutory form may entail penal consequences, but that by itself cannot be a ground to challenge the authenticity of a document.”

Since the documents were marked through the shop owner himself, the Court found no reason to doubt their credibility. It emphasised that taxation law non-compliance cannot override principles of civil evidence when assessing matrimonial claims.

“Court Can Award Value of Gold As on Date of Recovery, Even If Not Specifically Claimed”: Matrimonial Relief Can Be Moulded for Justice

The Court relied on its earlier ruling in Syamini S. Nair v. Sreekanth R. [2022 (3) KHC 145], which allowed Family Courts to grant the value of gold ornaments at the prevailing market rate on the date of recovery, even if such a prayer was not made in the pleadings, under Order VII Rule 7 CPC.

Quoting from the precedent, the Bench reaffirmed:

“When the Family Court was convinced of the factum of entrustment of gold ornaments with the husband and in-laws… nothing prevents the Family Court from granting an alternative relief by awarding the value of the gold ornaments as on the date of payment.”

In a similar vein, the Court held that in the present case, the wife would be entitled to receive the current market value of the 45 sovereigns if the ornaments were not returned in specie within the stipulated time.

“Wife Failed to Prove Gift of 12 Sovereigns by Relatives; Partial Cross Objection Rejected”

While the respondent–wife pressed her cross-objection claiming that all 65 sovereigns were proven, the Court was not inclined to accept the additional 12 sovereigns allegedly gifted by relatives, in the absence of corroborating witnesses:

“Although the respondent contended that her relatives had gifted her 12 sovereigns... she chose not to examine any of them or any other person acquainted with that fact.”

Thus, while partially allowing the cross-objection, the Court confined recovery to 45 sovereigns, considering both documentary and photographic evidence, as well as oral testimony.

“Specific Misuse of Gold Need Not Be Proven When Entrustment and Non-return Are Established”

The appellants also contended that the wife had failed to prove the exact purposes for which the gold was misappropriated, namely for house construction or sister’s marriage. The Court rejected this argument as immaterial to the core question of entrustment and failure to return.

The Bench noted that the wife’s statements regarding use of gold for family purposes were supported by the husband’s own admissions regarding timelines of house repair and his sister’s marriage. It observed:

“The contention that the respondent failed to prove the specific purposes for which the appellants misappropriated the gold ornaments is also untenable.”

Thus, the Court held that the liability for return or compensation arises from the established fact of entrustment and wrongful withholding, regardless of the specific application of the misappropriated gold.

In summary, the Kerala High Court’s judgment in Fahad V & Others vs. Ummuhabeeba serves as a robust affirmation of women’s rights to matrimonial property, particularly stridhan in the form of gold ornaments. The ruling clarifies several important legal positions:

• Tax law violations do not affect civil admissibility of documents like jewellery bills.
• Family Courts can grant monetary relief at current market rates, even if not specifically prayed for.
• Entrustment and retention alone are sufficient to establish liability, without the need to prove exact usage.

The Court ordered the appellants to return 45 sovereigns of gold ornaments within one month, failing which the respondent shall be entitled to recover their market value as on the date of recovery, but without interest.

Date of Decision: 03.11.2025