1998 (11) TMI 76 - HC - Income Tax

Court rules Commissioner lacked jurisdiction to require asset delivery under warrant. Seized gold returned for further proceedings.

The court held that the Commissioner lacked jurisdiction to require the court to deliver the assets seized under a warrant issued under section 132A of ... Search And Seizure Issues involved: The issues involved in the judgment are the jurisdiction of the warrant issued under section 132A of the Income-tax Act, 1961, and the seizure of gold from the custody of the court.Jurisdiction of Warrant u/s 132A:The petitioner, a resident of Kozhikode District, was carrying gold entrusted to him by a friend when he was arrested by security police and the gold was seized under sections 41(1)(d) and 102 of the Code of Criminal Procedure. Subsequently, the Commissioner of Income-tax seized the gold under a warrant issued u/s 132A. The petitioner challenged this action, arguing that the warrant and seizure were unauthorized as the gold was under the custody of the Judicial First Class Magistrate Court. The Commissioner justified the seizure stating that the gold represented undisclosed income and invoked sections 132A and 132B of the Income-tax Act. The court considered precedents such as CIT v. Balbir Singh and K. Choyi v. Syed Abdulla Bafakky Thangal to determine the legality of the warrant under section 132A. It was held that the Commissioner lacked jurisdiction to require the court to deliver the assets and directed the return of the seized gold to the Judicial First Class Magistrate Court-II.Return of Seized Gold:The court referred to the provisions of section 132A empowering the Commissioner to requisition assets representing undisclosed income. However, in this case, the gold was under the custody of the court when the warrant was issued, and the Commissioner could not require the court to deliver the assets. Citing precedents, the court held that the warrant issued under section 132A and the seizure of gold from the custody of the court were without jurisdiction. Consequently, the third respondent was directed to return the seized gold to the Judicial First Class Magistrate Court-II for further proceedings in accordance with the law.The original petition was allowed, and the gold seized was directed to be returned to the Judicial First Class Magistrate Court-II, Thiruvananthapuram, for appropriate consideration of pending applications, including any from the Income-tax Department, for the release of the gold.