1972 (10) TMI 19 - HC - Income Tax

Court upholds cash payment to tax department, returns seized items to petitioners. Criteria clarified for entitlement to seized articles.

Srinivasan And Another Versus Deputy Superintendent Of Police, Coimbatore And Others.

The court upheld the order directing the cash to be paid to the income-tax department, citing the Income-tax Act's provisions and the Commissioner's ... Seizure of money by police - whether income-tax officer can seize the same when no cognisable offence made out - if cognisable offence is not made out by the police the person from whom it was seized is the person who is entitled to the seized money. But if the income-tax officer is entitled to seize the amount then he would be the person entitled to it - resulting position is that the Magistrate was wrong in holding that the Customs Officer and the Gold Control Officer are entitled to the possession of the transistor and the jewels in question. I set aside the order of the court below in this respect and direct that the transistor and all the gold articles, other than the primary gold, seized from the petitioners be returned to them. As I have already observed, the order of the lower court regarding the delivery of cash to the income-tax department will stand confirmed Issues:1. Entitlement to possession of seized articles under section 523 of the Criminal Procedure Code.2. Seizure of cash amount by Income-tax Officer.3. Seizure of primary gold by Superintendent of Central Excise, Gold Control Unit.4. Seizure of gold jewels and transistor.Analysis:The judgment revolves around the entitlement to possession of seized articles under section 523 of the Criminal Procedure Code. The Deputy Superintendent of Police conducted a search at the petitioners' residence and seized various items, including cash, gold jewels, and a transistor. The Income-tax Officer filed a petition for the delivery of the cash amount based on the belief that it represented undisclosed income. The court upheld the order directing the cash to be paid to the income-tax department, citing the Income-tax Act's provisions and the Commissioner's authorization. The court emphasized that the Income-tax Officer, authorized to seize the amount, is entitled to possession in court custody, even in the absence of a charge-sheet by the police.Regarding the primary gold seized from the petitioners, it was acknowledged that its possession violated the Gold (Control) Act. The Superintendent of Central Excise, Gold Control Unit, was deemed entitled to seize the primary gold. However, the court found that the seizure of gold jewels and a transistor was not justified. The petitioners claimed the jewels belonged to various family members of a Hindu coparcenary. The court highlighted the legal requirements for seizure under the Indian Customs Act and the Gold (Control) Act, emphasizing the need for a reasonable belief at the point of seizure. The Superintendent's application lacked any indication of suspicion or belief that the petitioners violated the Acts, leading the court to rule against the seizure of the jewels and transistor.In conclusion, the court set aside the lower court's order regarding the gold jewels and transistor, directing their return to the petitioners. However, the order for the delivery of the cash amount to the income-tax department was confirmed. The judgment clarifies the criteria for entitlement to seized articles under the Criminal Procedure Code, emphasizing the importance of lawful seizure based on reasonable belief for different categories of items, including cash and controlled substances.