Gujarat High Court
Income Tax Officer (Investigation) vs Deputy Superintendent Of Police & 2 on 9 August, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
C/SCA/20532/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 20532 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
==========================================================
1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
==========================================================
INCOME TAX OFFICER (INVESTIGATION)....Petitioner(s)
Versus
DEPUTY SUPERINTENDENT OF POLICE & 2....Respondent(s)
==========================================================
Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Petitioner No. 1
MR PRANAV TRIVEDI, AGP for the Respondent No. 1
MR RK PATEL, WITH MR. DARSHAN R PATEL ADVOCATE for the
Respondents No. 2 - 3
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 09/08/2017
ORAL JUDGMENT
Page 1 of 5
HC-NIC Page 1 of 5 Created On Mon Aug 21 11:49:38 IST 2017 C/SCA/20532/2015 JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. This petition is filed by the Income Tax Department to challenge an order dated 07.11.2015 passed by the Deputy Superintendent of Police, Modasa. Brief facts are as under:
2. On 04.11.2015, the police authorities intercepted a Ford Fiesta car on Shamlaji-Himmatnagar highway and found that there were two passengers in the car, respondents No. 2 and 3 and, in the car, they were carrying cash amount of Rs. 1.40 crores. The police authorities therefore, seized the vehicle, the said cash amount and other valuables such as mobile phones etc. of the occupants of the car under a seizure memo. The case of the occupants was that they were the employees of a Angadia firm and the cash belonged to the angadias and was withdrawn from the bank accounts and was therefore, wrongly seized by the police authorities. An application for release of the cash was filed before the Judicial Magistrate, Modasa. Simultaneously, application was also moved before the police authorities for release of the cash.
3. On 04.11.2015 itself, the police authorities had informed the Income Tax Department about the seizure of the cash. On 06.11.2015, the Police Inspector, Modasa (Rural) sent a fax message to the Income Tax Officer, Ahmedabad, conveying that the angadias have contended that the cash amount is withdrawn from different branches of their bank. They also produced supporting documents. This amount was needed Page 2 of 5 HC-NIC Page 2 of 5 Created On Mon Aug 21 11:49:38 IST 2017 C/SCA/20532/2015 JUDGMENT looking to the ensuing Diwali vacation. The angadias have moved an application before the learned Magistrate on 05.11.2015 for release of the cash which was fixed for hearing on 06.11.2015. He, therefore, requested that a responsible officer of the Income Tax Department will be deputed to remain present before the Magistrate.
4. On 06.11.2015 itself, the department had issued summons to respondent Nos. 2 and 3 to remain present before the authority on 16.11.2015 to give evidence or to produce documents. On 07.11.2015, the Income Tax Officer applied to the learned Magistrate not to release the cash on the ground that the Income Tax Department has initiated proceedings under section 132 of the Act. The cash can, therefore, be released only by the department.
5. Case of the department is that ignoring such pleas, the Deputy Superintendent of Police, Modasa, passed order dated 07.11.2015 releasing the cash on certain terms and conditions. Counsel for the department submitted that the action of the said officer was needlessly hasty when the department is looking into the source of the cash, there was no reason why the same should have been released without awaiting of outcome of such inquiry. The department had issued notices to the persons, from whom the cash was seized, to appear and produce documents so that proper view could have been taken.
Page 3 of 5
HC-NIC Page 3 of 5 Created On Mon Aug 21 11:49:38 IST 2017
C/SCA/20532/2015 JUDGMENT
6. On the other hand, learned counsel Mr. R.K.Patel for the private respondents submitted that the source of the cash was well explained. The amount belonged to the Angadia firm. It was withdrawn from different bank accounts. Full disclosure was made before the Assessing Officer where the scrutiny assessment has been undertaken. In any case, the police authorities had no power to withhold the cash when even prima facie no offence was disclosed. He pointed out that no FIR was registered. Only an entry for information was recorded.
7. From the materials on record, it can be seen that the Income Tax Department has not issued any requisition with respect to the cash in question under section 132A of the Act. Under clause
(c) of sub-section (1) of Section 132A, it is open for the competent authority if he has reason to believe that any assets represent either wholly or in part income or property which has not been, or would not have been disclosed for the purpose of the Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, he may require the officer or the authority to deliver such asset to the requisitioning officer. When no such requisition was made, the police authority had no business to withhold the cash, if the same was not required for police parties and could not have been withheld under the powers of Criminal Procedure Code. So far as the police is concerned, when it was convinced that such amount was not involved in any illegal activity nor any Page 4 of 5 HC-NIC Page 4 of 5 Created On Mon Aug 21 11:49:38 IST 2017 C/SCA/20532/2015 JUDGMENT offence was registered against the occupants of the car or any other person which may have link to such cash, the said authority had no reason to, in fact, no power to withhold such amount. It was always open for the competent authority acting under section 132A of the Act to requisition such amount, if the conditions contained therein were not satisfied. However, without any such requisition, it was not open to ask the police authorities not to release the amount which the said authorities otherwise did not require to withhold.
8. Even otherwise, while releasing the amount, the Deputy Superintendent has imposed certain conditions one of them being that, if and when the Income Tax authorities required the persons from whom the amount was seized to appear and produce the amount, they would do so.
9. Under the circumstances, this petition is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) Jyoti Page 5 of 5 HC-NIC Page 5 of 5 Created On Mon Aug 21 11:49:38 IST 2017