Income-tax requisition over seized cash prevails over criminal custody powers, with Article 227 review remaining available.

Where seized currency is covered by valid income-tax requisition proceedings, the special statutory mechanism under the Income-tax Act prevails over ordinary criminal court custody powers under the Code of Criminal Procedure. The High Court held that the availability of a revisional remedy did not bar supervisory scrutiny under Article 227, rejected the maintainability objection, and directed that the seized cash be handed over to the Income Tax Department. It further held that the Department was entitled to retain the currency until completion of the tax proceedings, with preservation safeguarded through panchnama and videography rather than continued police custody.

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Issues: (i) Whether the objection to maintainability under Article 227 on the ground that a revision remedy was available could be accepted; and (ii) whether the seized currency notes were required to be handed over to the Income Tax Department under the statutory scheme governing requisition and custody of assets.

Issue (i): Whether the objection to maintainability under Article 227 on the ground that a revision remedy was available could be accepted.

Analysis: The impugned order of the Magistrate was amenable to supervisory scrutiny under Article 227 of the Constitution of India. The availability of a revisional remedy did not bar the Court from examining the legality and validity of the order in exercise of its supervisory jurisdiction.

Conclusion: The preliminary objection was rejected and the petition was held maintainable.

Issue (ii): Whether the seized currency notes were required to be handed over to the Income Tax Department under the statutory scheme governing requisition and custody of assets.

Analysis: Section 132 of the Income-tax Act, 1961 and the requisition framework under section 132A were treated as providing a special mechanism where assets suspected to represent undisclosed income can be placed at the disposal of the Income Tax Department. The Court relied on the settled view that criminal courts have limited power under sections 451 and 457 of the Code of Criminal Procedure, 1973 in such situations, and that once requisition proceedings are initiated the police or criminal court should not retain or release the currency contrary to the revenue process. The Court also applied the principle that custody of valuable muddamal should not be retained with the investigating agency for longer than necessary and that preservation can be ensured by panchnama and videography.

Conclusion: The seized currency notes were directed to be handed over to the Income Tax Department, which was held entitled to retain them till completion of the income tax proceedings.

Final Conclusion: The challenge to the Magistrate's refusal succeeded, the impugned order was set aside, and custody of the seized cash was transferred to the Income Tax Department for further action under the tax law.

Ratio Decidendi: Where seized currency is subjected to valid income-tax requisition proceedings, the special statutory mechanism governing delivery of assets to the requisitioning authority prevails over ordinary criminal court custody powers under the Code of Criminal Procedure.

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