Requisition over police-seized property fails where no reasonable belief of undisclosed assets is shown.

A requisition for silver under the Income-tax Act was treated as unsustainable where the silver had already been seized by police in criminal proceedings and custody was before the criminal court. The Department had not produced sufficient material to form a reasonable belief that the silver represented undisclosed assets, which was necessary to justify action under the requisition provision. On those facts, the Magistrate should not have entertained the requisition, and the Sessions Judge's order setting aside the custody direction was treated as lawful. The criminal seizure and prior court control over the property were decisive, and the revision was not successful.

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Issues: Whether the requisition issued under section 132A of the Income-tax Act, 1961 was maintainable in respect of silver seized by the police under the Code of Criminal Procedure, 1973, and whether the Sessions Judge was justified in setting aside the Magistrate's order handing over custody of the silver to the Income-tax Department.

Analysis: The seizure of the silver had been made by the police under section 102 of the Code of Criminal Procedure, 1973, and the question of custody was already before the criminal court. The Court held that the Income-tax Department had not shown sufficient material to form a reasonable belief that the silver represented undisclosed assets so as to sustain action under section 132A of the Income-tax Act, 1961. It further held that, on the facts, the Magistrate ought not to have entertained the requisition and that the order of the Sessions Judge was in accord with law. The Court also noted that proceedings had been initiated under the criminal law before the departmental requisition and that the earlier stay order had not been respected.

Conclusion: The requisition under section 132A was not maintainable on the facts, and the order setting aside the Magistrate's direction was upheld.

Final Conclusion: The revision failed, and the direction requiring the silver to be returned to the Chief Judicial Magistrate for deposit in the treasury stood confirmed.

Ratio Decidendi: A requisition under section 132A of the Income-tax Act, 1961 cannot be sustained where the property was already seized by the police in criminal proceedings and the Department lacks material for a reasonable belief that it represents undisclosed assets.

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