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2023 (12) TMI 413 - BOMBAY HIGH COURTCash seized by the Election Officer from the vehicle owned by the petitioner - cash was in demonitized currency notes of Rs. 500/- and Rs. 1000/- - scope Code of Conduct with regard to the elections of the Nagar Panchayat was in force and hence it was impermissible to carry cash of such value in the vehicle - RBI refused to accept Notes as its liabilities with regard to such notes ceased on 31/12/2016 and the notes of the said denominations were no longer a legal tender - petitioner received a communication from the Deputy Director of Income Tax (Inv.), Unit – II, Nagpur in which it was stated that the specified bank notes (SBNs) could not be accepted for deposit without any Court orders HELD THAT:- Income Tax Authorities while acting under the Act of 1961 had seized the amount of Rs. 30,00,000/-. The procedure prescribed by Section 131 of the Act of 1961 was duly followed. The amount seized was thereafter declared as an additional income of the petitioner followed by payment of requisite income tax and interest. There does not appear any justifiable reason to preclude the petitioner from receiving the aforesaid amount in lieu of the seized SBNs. Much prior to the appointed day, the seizure had been effected and requisite formalities had been completed. The provisions of Chapter XIII of the Act of 1961 and especially Sections 131, 132 and 132B indicate that seizure of the SBNs in the present circumstances been undertaken by a Law Enforcement Agency referred to in the proviso to Section 5 of the Act of 2017 and hence the petitioner is entitled to return of the aforesaid amount. The interests of justice and fairplay warrant issuing of such direction to the RBI, which direction would be an order envisaged by proviso (d) to Section 5 of the Act of 2017. For the aforesaid reasons, it is held that the petitioner is entitled to return of the amount of Rs. 30,00,000/- that was seized by the Election Officer on 17/11/2016. To facilitate refund of the said amount, the Reserve Bank of India is directed to accept the SBNs valued at Rs. 30,00,000/- and thereafter deposit the same in the PD account of the Principal Commissioner of Income Tax (Central), Nagpur. On such deposit, the Assistant Director of Income Tax (Inv.) – II, Nagpur shall take necessary steps to ensure that the said amount is refunded to the petitioner on completion of the requisite formalities. The entire exercise be completed within a period of six weeks from today.
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