Income-tax requisition prevails over criminal custody powers, requiring seized currency notes to be handed to the department.
Where a valid income-tax requisition for seized currency notes had been initiated and served, the special statutory machinery governed custody and release, and the criminal court could not invoke section 451 of the Code of Criminal Procedure to order release to the complainant. The police authority was under a statutory duty to hand over the currency notes to the Income-tax Department for completion of the departmental proceedings; retention or release to a private party after requisition was treated as unlawful.
Issues: (i) Whether, after initiation of proceedings and service of requisition under the income-tax law, the criminal court could release the seized currency notes to the complainant under the Code of Criminal Procedure; (ii) Whether the police authority was bound to hand over the seized currency notes to the Income-tax Department for completion of the departmental proceedings.
Issue (i): Whether, after initiation of proceedings and service of requisition under the income-tax law, the criminal court could release the seized currency notes to the complainant under the Code of Criminal Procedure.
Analysis: The seized currency notes were the subject of proceedings initiated by the Department, and the statutory scheme governing requisition of assets was treated as distinct from the limited inquiry available to the criminal court under the Code. Once requisition proceedings were invoked, the court was held to have no authority to decide on release of the assets by resort to section 451 of the Code, because custody and release were to be governed by the special income-tax machinery.
Conclusion: The criminal court had no power to order release of the seized currency notes to the complainant after the departmental requisition had been initiated.
Issue (ii): Whether the police authority was bound to hand over the seized currency notes to the Income-tax Department for completion of the departmental proceedings.
Analysis: The statutory obligation under the requisition provision required the officer in custody of the assets to deliver them to the requisitioning authority. The police could not retain the currency notes or release them to a private party once a valid requisition had been served, and failure to comply with the requisition was treated as illegal.
Conclusion: The police authority was bound to hand over the seized currency notes to the Income-tax Department.
Final Conclusion: The revision succeeded, the magistrate's release order was set aside, and custody of the seized currency notes was directed to be transferred to the Department for completion of the income-tax proceedings.
Ratio Decidendi: Where a valid income-tax requisition for assets is initiated and served, the special statutory mechanism prevails over the criminal court's ancillary power regarding interim custody, and the custodian authority must deliver the assets to the requisitioning department.
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