PMGKY deposit scheme eligibility and police seizure of cash turn on whether prosecution has actually been initiated.

Police interception of undisclosed cash during enquiry, followed by transfer of the amount to the tax department, was treated as lawful where no FIR or penal prosecution had been shown. The commentary further explains that the PMGKY Deposit Scheme applies only where prosecution for the specified offences has been initiated by complaint or charge-sheet, not where investigation is merely pending, and that an eligible declarant may still seek consideration under the Scheme. It also notes that the person may have counsel present at a visible but not audible distance during interrogation and may receive protection against coercive steps, while unconditional release of the seized cash was not accepted.

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Issues: (i) Whether the police action in intercepting the petitioner, retaining the cash, and forwarding it to the Income Tax Department was liable to be interfered with; (ii) Whether the petitioner was entitled to protection from coercive action and to avail the benefit of the PMGKY Deposit Scheme, including assistance of counsel during interrogation.

Issue (i): Whether the police action in intercepting the petitioner, retaining the cash, and forwarding it to the Income Tax Department was liable to be interfered with.

Analysis: The cash was intercepted during enquiry, no FIR had been registered, and the amount was handed over to the Income Tax Department for further action. The Court held that possession of undisclosed cash did not disclose an offence under the Indian Penal Code and that the police did not act under the Income-tax Act. On these facts, the police action was treated as lawful and not vulnerable to interference.

Conclusion: The challenge to the police action was rejected.

Issue (ii): Whether the petitioner was entitled to protection from coercive action and to avail the benefit of the PMGKY Deposit Scheme, including assistance of counsel during interrogation.

Analysis: The Scheme was construed as applicable where prosecution for the specified offences had been initiated by charge-sheet or complaint, not merely where investigation was continuing. Since no prosecution was shown to be pending against the petitioner and he was not covered by the exclusions in the Scheme, the authorities were directed to consider any declaration under the Scheme. The Court also accepted that the petitioner could have an advocate present at a visible but not audible distance during interrogation and recording of statement, and granted protection against coercive steps.

Conclusion: The petitioner was granted protection from coercive action and permitted to seek consideration under the Scheme, but the prayer for unconditional return of the seized cash was declined.

Final Conclusion: The writ petition was disposed of by partly granting relief in the petitioner's favour, while leaving the claim for unconditional release of the seized amount unaccepted.

Ratio Decidendi: An exclusion clause in a tax amnesty or disclosure scheme referring to prosecution applies only when prosecution has been initiated by complaint or charge-sheet, and not merely because investigation is pending; separately, police interception and transfer of cash to the tax authorities is not invalid where no criminal prosecution under the penal law is shown.

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