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The Hon'ble High Court in its order reported in PUR 1996 Vol. 1, p. 561 in C.W.J.C. No. 1656 of 1995 (R) and C.W.J.C. Nos. 459, 541, 602, 687, 1617, 1642, 1.644 of 1996 (R) observed as under:

If money is misappropriated on the basis of fake bills and vouchers it would constitute criminal offence.

If the intention were to cheat at the very inception of the transaction, the person taking loan would be as much liable for criminal action for recovery of the money in the civil action. Likewise, excess drawals of money from Government treasuries may also partake a criminal character, if the intention of the person drawing the money was to cheat the Sate Exchequer.

2.4. Consequently, all the cases related to the criminal conspiracy of fraudulent withdrawal from the State Exchequer were taken over by the CBI from the State Police for proper investigation. The CBI made a detailed investigation in all the cases and thereafter filed chargesheets in the designated Special Court of CBI, AHD, Patna, against the various accused including the assessee. The apprehensions of the Hon'ble High Court proved to be correct during course of investigation as the same revealed a well hatched criminal conspiracy of defrauding the State Exchequer by systematic fraudulent withdrawal of funds by the connivance of suppliers, AHD officials, Treasury officials, Budget officials, State Secretariat officials, senior bureaucrats and politicians. The money so defrauded was divided among all these persons. The CBI has made sizeable recovery of the defrauded money from the possession of these conspirators by way of seizures of movable and immovable assets.

(g) That the recoveries of defrauded funds are based on the claim of the State that the money belongs to them and not of those who have withdrawn the money. The conspirators who have fraudulently withdrawn the money do not have any ownership right on the same and, therefore, the money so fraudulently withdrawn be recovered and returned back to the State and those involved in the criminal conspiracy be criminally prosecuted for having indulged into a criminal act under the Indian Penal Code.

(h) Here in this case, everything belonging to the accused assessee is under attachment of the State, who is claiming ownership over the money and the ownership over the money is not refuted or denied by the appellant. In such a case, if still another wing of the State wants to tax that amount which belongs to itself, that will amount to taxing an amount which belongs to the State and not to the appellant.

(i) The State has accepted that this money rightfully belongs to AHD and should be recovered from the accused.

(j) That CBI has conducted raids on the accused AHD officials, politicians and the appellant and substantial sum has been recovered and properties attached.

(k) That these acts of recoveries are based on the claim of the State that the money belongs to them and not to those who have withdrawn the money. The conspirators who have fraudulently withdrawn the money do not have any ownership right on the same and, therefore, the money so fraudulently withdrawn be recovered and returned back to the State and those involved in the criminal conspiracy be criminally prosecuted for having indulged into a criminal act under the Indian Penal Code.