TaxTMI 
TaxTMI 
2008 (4) TMI 275
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....he proceedings of seizure were undertaken by P. S. Neemuch, Cantonment under section 41/102 of the Criminal Procedure Code and an application by the petitioner, the Director of Income-tax, Bhopal as well as an application by M/s. Payal Selection and Company, Jodhpur was filed before the Chief Judicial Magistrate, Neemuch who ordered the handing over the custody of the seized silver to the Director of Income-tax and being aggrieved by this order dated May 29, 2004. Revision No. 64 of 2004 was filed by the respondent M/s. Payal Selection and Company before the Sessions Judge, Neemuch, who by the impugned order dated July 7, 2004, issued the directions to the Chief Judicial Magistrate to handover the silver to the treasury as mentioned above and being aggrieved the Director of Income-tax has filed the present revision. 3. Learned counsel for the petitioner averred that since a similar application was also filed by the Department under section 451/457 of the Criminal Procedure Code read with section 132A of the Income-tax Act (hereinafter referred to as "the Act" for brevity) and under section 132A of the Income-tax Act, the Director General or the other officer so named in the sectio....
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....rned counsel has stressed the fact that the court had in the said case held that it was not the function of the magistrate to embark upon an inquiry into the nature of the assets and ownership of the same in a summary way and when the Chief Judicial Magistrate had directed the delivery of the assets to the assessee, the court had on revision held that the order passed by the magistrate was erroneous and illegal and directed that the seized assets be handed over to the Income-tax Officer or the authorized officer. 7. To bolster his submissions, learned counsel relied on CIT v. Shri Ram Fibres Ltd. [2005] 272 ITR 562 (Delhi), Ibrahim Othayoth v. Sub-Inspector of Police [1998] 232 ITR 320 (Ker), Shikharchand Jain v. CIT [1983] 140 ITR 552 (MP), Suresh Bhai Bhola Bhai Jani v. Union of India [2001] 249 ITR 363 (Raj), Dinesh Chandra v. State of M. P. [2000] 241 ITR 780 (MP), Wakil Kumar v. CIT [2003] 259 ITR 698 (Patna), Amar Agrawal v. Director of Income-tax (Investigation) [2005] 276 ITR 182 (MP), Raji Agrawal v. State of Gujarat [2007] 290 ITR 449 (Guj). 8. To stress the fact that the Income-tax Department was entitled to the custody of the seized assets pointing out section 132A of....
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....ice had seized the silver under section 102 of the Criminal Procedure Code suspecting it to be stolen property which was also contrary to the facts and circumstances of the case. The respondent-company had made due application under section 451/457 of the Criminal Procedure Code for returning of the goods on supurdginama stressing that the time factor was an important aspect in the entire case; learned counsel for the respondent stated that the application was moved before the Chief Judicial Magistrate, Neemuch on April 26, 2004, thereafter, by the alleged authorization under section 132A of the Income-tax Act, the Income-tax Department also filed an application before the Chief Judicial Magistrate, Neemuch for supurdgi of the goods. The Chief Judicial Magistrate, Neemuch rejected the application of the respondent-company for supurdgi of the goods and ordered that the custody of the seized property be given to the Income-tax Department under section 132A of the Act by order dated May 29, 2004. Being aggrieved, the respondent-company filed a revision as already stated above and which was admitted by the Sessions Judge on May 31, 2004 and a stay order was granted by the sessions judg....
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....he apex court clearly stated that it would not go into the question as to who may physically seize the assets since the situation had not arisen in the said case as the assessment had been completed. 13. Further, learned counsel for the petitioner relied on CIT v. Balbir Singh [1993] 203 ITR 650 (P&H) whereby the High Court of Punjab and Haryana discussing the scope of power under section 132A of the Act held that the order in question can be issued only to an officer or authority and the order on requisition in respect of assets in custody of the court and when the court had issued an order to the Treasury Officer held that the refusal of the Treasury Officer to release the money held that it had no independent jurisdiction over the assets and the remedy availed of to the Income-tax Officer was to apply to the Chief Judicial Magistrate for release of the money in its favour. It could not be issued requisition under section 132A of the Act, which was without jurisdiction. Moreover, relying on Abdul Khader v. Sub-Inspector of Police [1999] 240 ITR 489 (Ker), learned counsel averred that section 132A of the Income-tax Act, 1961 empowered the Commissioner of Income-tax to order requi....
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....hority under any other law for the time being in force as contemplated under clause (c) of section 132A(1) read with clause (a) thereof. Held, (i) that the petitioners' rights under article 21 of the Constitution had been violated by the search and seizure of the properties as per the seizure list; (ii) Respondents Nos. 3 to 5 had acted contrary to law and in fact contravened laws in the course of search and seizure, and by changing the records of investigation had committed serious violation to the system of the discipline of law under which alone they were required to act; (iii) There was no occasion for respondents Nos. 4 to 6, namely, the Income-tax Officer in W. P. No. 17700 of 1996 to intervene and in any case respondents Nos. 3 to 5 in W. P. Nos. 4926 of 1996 and respondents Nos. 4 to 6 in W. P. No. 17700 of 1996 had bypassed the court which alone was competent to decide about the custody of the properties allegedly seized in the course of investigation of a case registered with the police under section 102 of the Criminal Procedure Code, 1973. There had been gross violation of law by the entry of the Income-tax Officers to take delivery of the properties from the police ....
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....n requisition under section 132A of the Income-tax Act can be issued to a "court" and not only to an "officer" or "authority" as prescribed under section 132A of the Act and whether the court would not amount to "officer or authority" in respect of section 132A of the Act and has still not been settled, since there are contrary views as already stated above. However, this court need not go into the controversy since it is dependent on the question whether the proceeding under section 102 of the Criminal Procedure Code would bar the filing of the application under section 132A of the Income-tax Act by the Department and whether the provisions of a special law would prevail over a general law. In the instant case, I find that the proceedings were initiated under the Criminal Procedure Code prior to time and moreover the same are already in question before the writ court in the High Court of Rajasthan between both the parties as already stated above. 18. Whereas considering the matter of K. Choyi v. Syed Abdulla Bafakky Thangal [1980] 123 ITR 435 (SC), I find that the apex court did not consider it necessary to decide whether section 132A of the Act would be applicable in the said ca....