Retention of seized property needs clear legal authority; absent a valid tax demand, revenue cannot keep money or documents.

Revenue authorities cannot retain seized money or documents without a valid assessment, an enforceable tax demand, or some other clear statutory authority. The material showed that the earlier criminal proceedings no longer survived, and no subsisting income-tax demand was in force. On that basis, continued retention of the property was unlawful, because the State must have clear authority of law to hold seized assets. The challenge to the direction for return of the property therefore failed.

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Issues: Whether the revenue authorities could retain the seized money and documents against an alleged tax demand when there was no valid assessment or enforceable demand and the criminal case had ceased to survive.

Analysis: The seized amount and papers had initially been directed to be returned in the criminal proceedings, and the later proceedings disclosed that there was no subsisting criminal case. The record further showed that no valid order of assessment or enforceable income-tax demand was in force. In the absence of a legal basis, the revenue could not continue to hold the money merely on the apprehension that a demand might arise or on the basis of an earlier, invalid adjustment. Retention of property by the State requires clear authority of law.

Conclusion: The revenue had no lawful authority to retain the seized amount or documents, and the challenge to the order directing return of the property failed.

Ratio Decidendi: Seized money or documents cannot be retained by the revenue in the absence of a valid assessment, an enforceable tax demand, or any other clear statutory authority.

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