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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the revisional court could exercise suo motu jurisdiction against the magistrate's order granting interim custody of seized cash and jewellery. (ii) Whether, after issuance of an income tax warrant of authorisation, the magistrate had jurisdiction to release the seized property on supurdginama.
Issue (i): Whether the revisional court could exercise suo motu jurisdiction against the magistrate's order granting interim custody of seized cash and jewellery.
Analysis: The order passed by the Special Railway Magistrate determined the claimed ownership of the seized property by considering supporting documents such as accounts, income tax returns and bank records. An order affecting the right to ownership and interim custody of property is not merely interlocutory. It is an intermediate order within the scope of revisional interference under Section 397 of the Code of Criminal Procedure, 1973.
Conclusion: The revisional court had jurisdiction to take suo motu cognizance, and no jurisdictional error was made out on this ground.
Issue (ii): Whether, after issuance of an income tax warrant of authorisation, the magistrate had jurisdiction to release the seized property on supurdginama.
Analysis: Section 131 and Section 131(1A) of the Income-tax Act, 1961 empower income tax to enquire into concealed income and to investigate the source and tax compliance of cash, jewellery and other valuables even where the property is found in a police investigation. Once a warrant of authorisation under Section 132(1) of the Income-tax Act, 1961 had been issued, the magistrate could not override that process by directing release of the same property on supurdginama. The prior authority of the income tax department excluded the magistrate's power to grant interim release in respect of the seized property.
Conclusion: The magistrate lacked jurisdiction to release the seized cash and jewellery on supurdginama after issuance of the income tax warrant of authorisation.
Final Conclusion: The challenge to the revisional order failed because the seized property was within the income tax investigation regime and the magistrate's release order could not be sustained.
Ratio Decidendi: An order determining interim custody and claimed ownership of seized property is an intermediate order revisable under Section 397 of the Code of Criminal Procedure, 1973, and once a warrant of authorisation is issued under the Income-tax Act, 1961, the magistrate cannot direct release of that property on supurdginama.
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