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Issues: (i) Whether an order under Section 132(3) of the Income-tax Act, 1961 could be invoked without an entry, search, or seizure under Section 132(1) of that Act; (ii) Whether, after the property had already been dealt with by a final order under Section 523 of the Criminal Procedure Code, the Special Magistrate had jurisdiction to entertain the subsequent application.
Issue (i): Whether an order under Section 132(3) of the Income-tax Act, 1961 could be invoked without an entry, search, or seizure under Section 132(1) of that Act.
Analysis: Section 132(1) contemplates entry and search of a building or place and authorises seizure of articles found in the course of such search. Section 132(3) is a special ancillary power intended for situations where seizure is not practicable after such search and discovery. On the facts, there had been no search by the authorised officer under Section 132(1); the goods were seized by the police in a criminal case and were in court custody. The statutory condition for invoking Section 132(3) was therefore absent.
Conclusion: The order under Section 132(3) was not legally sustainable in the absence of a search under Section 132(1).
Issue (ii): Whether, after the property had already been dealt with by a final order under Section 523 of the Criminal Procedure Code, the Special Magistrate had jurisdiction to entertain the subsequent application.
Analysis: The cash in court custody had already been released by a prior order under Section 523 of the Criminal Procedure Code, and no revision had been filed against that order. Once that order became final, nothing remained for the court to decide in relation to the cash, and the court had become functus officio in respect of that matter.
Conclusion: The subsequent application was not maintainable before the Special Magistrate.
Final Conclusion: The revision failed because the statutory basis for invoking Section 132(3) was absent and the court had already exhausted its jurisdiction over the cash by a final earlier order.
Ratio Decidendi: Section 132(3) can be invoked only as an adjunct to a search and discovery made under Section 132(1), and a court becomes functus officio on the subject matter once a final unchallenged order has been passed in relation to it.
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