Shiva as Nataraja, Lord of the Dance.

CONTROVERSY: The Shiva statue. Photo: Supplied

The National Gallery of Australia may have a moral obligation to return the allegedly smuggled Shiva sculpture back to India and its rightful home in a southern temple, says the former director of the National Museum.

Craddock Morton, who directed the museum from 2003-2007, said the scandal gripping the gallery over the provenance of the $5 million sculpture purchased from a disgraced New York art dealer raised questions over whether major institutions should hold such items at all.

"I think it also opens the larger question of how many of these major treasures of the past of other countries should be acquired by museums not within their own countries, and whether this is a signal that really the West - for want of something better to call it - should really be thinking hard about the return of these objects," he said.

''I think the question of who owns the past … if it was acquired legally and then legally owned and so forth - I think that sort of legal question is really superseded by the moral question about where something is best located. My feeling is that something is best located where it belongs, and where it comes from, for a whole range of reasons, not least because to understand something to the utmost extent you can, I think you need to understand it in situ.''

As well as running the National Museum, Mr Morton was chair of the National Cultural Heritage Committee from 2006 to 2010, the body set up to implement the Protection of Movable Cultural Heritage Act 1986. The act protects both national and international cultural property, giving effect to the 1970 UNESCO Convention prohibiting and preventing illegal imports, exports and transfer of cultural property.

Mr Morton said it was almost always the case that developed countries were forced to repatriate cultural objects back to the developing countries of their origin, rather than the other way around.

Robyn Sloggett, director of the centre for cultural materials conservation at the University of Melbourne, argues there remain unresolved ethical issues regarding antiquities. ''For museums there's a stronger moral position that should be taken,'' Associate Professor Sloggett said, regardless of whether an object was acquired before the 1970 UNESCO ruling.

Asked about the works acquired by the NGA, she said: ''The checking of provenance is something that in the past, and it would appear currently, … is not being done as rigorously as it could be.

''The fact that you have a document accompanying an artwork is hardly any of what constitutes proper evidence … On the educative argument it falls down, on the moral argument it falls down, but on the legal argument it (also) falls down.''

with Debbie Cuthbertson