1998 (3) TMI 46 - HC - Income Tax

Summary

Issues:
1. Quashment of seizure of cash and silver by Police and subsequent handing over to Income-tax Department.
2. Legality of seizure under section 102 of the Criminal Procedure Code.
3. Authority to hand over seized property to Income-tax Department without magistrate's orders.
4. Jurisdiction of court to interfere in property disposal under the Code of Criminal Procedure.

Analysis:
1. The applicants sought quashment of the seizure of cash and silver by the Police, Industrial Area, Ratlam, and subsequent handing over to the Income-tax Department. The property was seized from the possession of applicants by the Station House Officer. The seized property was later handed over to the Income-tax Department under sections 132 and 132A of the Income-tax Act.

2. The applicants contended that the seizure under section 102 of the Criminal Procedure Code was not justified as the property was not linked to any cognizable offense. However, the court held that section 102 empowers the police to seize property on suspicion without court assistance. The court emphasized that interference with such seizures under section 482 of the Criminal Procedure Code is not within the High Court's power, and the proper remedy is to approach the magistrate under the relevant provisions.

3. The court addressed the issue of handing over the seized property to the Income-tax Department without magistrate's orders. It noted that since the property was not deposited in court and was no longer required for any pending case, the Income-tax Department lawfully took possession under the warrant issued under the Income-tax Act. The court cited precedents to support the jurisdiction of income-tax authorities in dealing with such seizures and emphasized that the criminal courts cannot intervene in the disposal of property under the Code of Criminal Procedure.

4. The judgment highlighted previous cases where the courts upheld the authority of income-tax authorities to handle seized property and emphasized that challenges against such proceedings should be pursued under the provisions of the Income-tax Act itself. The court concluded that the inherent power under section 482 of the Criminal Procedure Code cannot be invoked to challenge the actions of the Income-tax Department in this case. The petition was dismissed, affirming the legality of the seizure and subsequent actions taken by the Income-tax Department.