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Issues: Whether seized cash in court custody should be released to the petitioners instead of being retained for the Income Tax Department, and whether such release could be made subject to security for repayment or redeposit.
Analysis: The petition concerned money seized from the petitioners and produced before the Magistrate. The earlier order directing release to the Income Tax Department was challenged on the ground that the department had not concluded assessment within the time indicated in an earlier precedent. The Court followed its prior view that the Magistrate cannot compel the revenue to conclude assessment proceedings within a fixed time while directing release of the money to the department. The Court held that the impugned order could not stand and that the amount was liable to be released to the petitioners, but only with adequate protection to ensure repayment or redeposit if required. Accordingly, the petitioners were required to execute a bond and furnish a bank guarantee for the full amount, and the department was directed to finalise assessment according to law.
Conclusion: The order directing release of the cash to the Income Tax Department was set aside, and the petitioners were held entitled to receive the amount on furnishing bond and bank guarantee, with assessment proceedings to be completed in accordance with law.
Final Conclusion: Relief was granted to the petitioners to the extent of getting custody of the seized amount, while preserving the revenue's safeguard through security and leaving assessment to proceed under the statute.
Ratio Decidendi: A Magistrate cannot direct the revenue to complete assessment within a fixed time as a condition for dealing with seized money, and where release is ordered, it may be protected by suitable security to secure repayment or redeposit if necessary.
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