2021 (4) TMI 354 - HC - Income Tax

Court Orders Response to Seized Cash Appeal, Mandates Hearing & Decision in 4 Weeks Following Election SOP.

The HC disposed of the Writ Petition, directing respondents to consider the petitioner's representation for the return of seized cash, taking into account ... Seeking release of cash as seized from the petitioner - exercise conducted under the guidelines Standard Operating Procedure Order / Instructions of the Election Commission of India - petitioner submitted a representation on 14.03.2019 to the District Election Officer / District Collector, Tirunelveli, requesting for return of the seized cash and informing them that there is an urgent need for the said cash to meet out the expenditure for their School - HELD THAT:- It is settled law that only when there is admission of liability on the side of the respondents, a positive direction can be issued by this Court under Article 226 of the Constitution of India for refund / release of the money, which is allegedly seized from the petitioner. In the case on hand, as seen from the counter affidavit and also as seen from the submissions made by the learned Senior Standing counsel, the respondents have not admitted that they are liable to release the seized cash back to the petitioner. It is their case that the request of the petitioner for releasing of the cash is under investigation. In such view of the matter, this Court cannot issue a positive direction as sought for by the petitioner in this Writ Petition. As seen from the documents filed along with this Writ Petition, several representations have been given by the petitioner for return of the seized cash. Further, it is contended by the learned Senior counsel for the petitioner that funds which were seized as early as on 12.03.2019 are urgently required for the smooth functioning of the School run by the Charitable Trust. Therefore, this Court is of the considered view that the representations of the petitioner seeking for release of the seized cash will have to be considered by the respondents expeditiously. For the foregoing reasons, this Court directs the first and second respondents to consider the representation of the petitioner dated 18.03.2019 requesting for release of the seized cash amounting which was seized from the petitioner on 12.03.2019 and pass final orders on merits and in accordance with law, after giving due consideration to the Standard Operating Procedure Order / Instructions, issued by the Election Commission of India on 29.05.2015 as well as the Hon'ble Division Bench Judgment of the Patna High Court in the case of M/s.Indian Traders Vs. State of Bihar and others [2019 (6) TMI 101 - PATNA HIGH COURT], by giving sufficient opportunity to the petitioner including granting him the right of personal hearing within a period of four weeks from the date of receipt of a copy of this order. Issues Involved:1. Legality of the seizure of cash by the State Surveillance Team/Flying Squad.2. Compliance with the Standard Operating Procedure (SOP) of the Election Commission of India.3. Authority of the Income Tax Department to retain the seized cash.4. Prematurity of the Writ Petition filed by the petitioner.5. Consideration of representations for the return of the seized cash.Issue-wise Detailed Analysis:1. Legality of the Seizure of Cash:The petitioner, a registered Public Charitable Trust running educational institutions, claimed that cash amounting to Rs. 68,14,000 was seized by the State Surveillance Team/Flying Squad on 12.03.2019 while their Managing Trustee was en route to deposit the money in the bank. The petitioner asserted that the seizure was unjustified as the cash belonged to their School and was accounted for.2. Compliance with the SOP of the Election Commission of India:The petitioner argued that the Standard Operating Procedure (SOP) issued by the Election Commission of India on 29.05.2015 was not followed. Specifically, Paragraphs 7, 8, and 16 of the SOP mandate the registration of an FIR within 24 hours of seizure and the release of cash if no FIR is filed within seven days. The petitioner contended that no FIR was registered, and thus, the retention of the cash was illegal.3. Authority of the Income Tax Department to Retain the Seized Cash:The respondents, represented by the Income Tax Department, maintained that the investigation was ongoing to determine whether the seized cash belonged to the Managing Trustee in his individual capacity or to the School. They argued that the Writ Petition was premature as the investigation had not concluded, and thus, they could not release the cash.4. Prematurity of the Writ Petition:The respondents contended that the Writ Petition was filed prematurely without waiting for the outcome of the investigation. They emphasized that only after the investigation could it be concluded whether the cash belonged to the School or the Managing Trustee, and thus, the petition was not maintainable.5. Consideration of Representations for the Return of the Seized Cash:The petitioner submitted several representations to the District Election Officer/District Collector and the Assistant Director of Income Tax Department (Investigation) requesting the return of the seized cash, citing urgent financial needs for the School. Despite these representations, the cash was not returned, prompting the petitioner to seek judicial intervention.Judgment:The Court acknowledged that the respondents had not admitted liability to release the seized cash and that the investigation was still pending. Therefore, a positive direction for the release of the cash could not be issued under Article 226 of the Constitution of India. However, the Court directed the respondents to consider the petitioner's representation dated 18.03.2019 expeditiously, taking into account the SOP of the Election Commission of India and the Division Bench Judgment of the Patna High Court in a similar case. The respondents were instructed to provide a personal hearing to the petitioner and pass final orders within four weeks.Conclusion:The Writ Petition was disposed of with directions to the respondents to consider the petitioner's representation and make a decision on the release of the seized cash in accordance with the law and relevant SOPs. No costs were awarded, and the connected miscellaneous petition was closed.