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TMI Blog2003 (12) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the First Class, Chavakkad, stating that the money seized was the unaccounted income from the business of the petitioner and requesting that the amount may be released to the Income-tax Department. On April 11, 2003, the learned Magistrate dismissed the petition stating that until a final report is filed by the police the amount could not be released. The Income-tax Department filed Crl. R.P. No. 29 of 2003, in the Sessions Court, Thrissur, and that revision was dismissed. The police filed a report on July 4, 2003, in the court of the Magistrate stating that sections 41(1)(d) and 102 of the Criminal Procedure Code may be deleted and investigation had to be conducted under section 3(b) and (c) of the Foreign Exchange Management Act. Annexure D is the report sent to the court stating that the police made a request to the Enforcement Directorate, Kozhikode, to take over the investigation of the crime and one Ananthakrishnan, Chief Enforcement Officer, went to the police station and received from there the copies of the records of the case. In annexure D request is made to the court to hand over the first information report and other connected records to the Enforcement Directora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the giving of money to the Enforcement Directorate. The submission made by learned counsel appearing for the petitioner is that the money was seized by the police and a crime was registered and on conducting investigation it was found that the petitioner and the other accused did not commit any offence which the learned Magistrate could take cognizance of and since the proceedings in the court of the Magistrate came to an end the money has to be given back to the person from whom it was seized. Learned counsel points out the provisions in the Foreign Exchange Management Act which give powers of search and seizure to the officers under the Act and submits that they can have possession of the articles seized on making search as provided in the Act. The petitioner would contend that the Enforcement Directorate cannot make a request to court to hand over the money which is kept in the custody of the court since the seizure of money was made by the police on the assumption that cognizable offences were committed by the accused. In this context it is pointed out that the violation of the provisions of the Foreign Exchange Management Act has not been made an offence punishable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under section 132 of the Income-tax Act. Under section 132(1)(iii) of the Income-tax Act the authority under the Income-tax Act has the power to seize the amount which is income which had not been disclosed for the purposes of the Income-tax Act. It was on the above ground that the Income-tax Department made the request to get the amount from court. Referring to various decisions which dealt with the powers of the Income-tax Officers to seize money which is income not disclosed for the purposes of the Income-tax Act the learned judge found that the learned Magistrate was correct in giving the money to the person from whom it was seized. In the above case, police after conducting investigation of the crime, filed a final report referring to the case as one of mistake of fact. The referred report was to the effect that the second respondent had not committed any offence and that the money seized from him actually belonged to the first respondent. In Assainar v. ITO [1975] 101 ITR 854 (Ker), it was held that when articles have been seized pursuant to a provision in a statute as long as the enquiry is pending the person who seized the articles will be in the position of a bailee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and authority to have that custody, it would not be proper to say that possession as contemplated by section 132 was still with the person from whom the moneys and goods were seized by the Customs Department. In the above case the Customs authorities conducted search and seized money and car and took proceedings under section 110(2) of the Customs Act. The proceedings of the Customs authorities were challenged in the High Court by filing a writ petition and the order made by the Customs authorities was quashed by a learned single judge of the High Court of Punjab and Haryana. An appeal filed before the Division Bench was dismissed. After that, the person from whom seizure was made approached the Customs authorities for return of money and also the car which was taken into custody by the Customs authorities. The Income-tax Officer served a warrant of authorisation issued under section 132 of the Income-tax Act and rule 112(11) of the Rules on the person to whom the article belonged and on the Customs Department. The income-tax authorities took possession of the cash. The respondent in the appeal before the Supreme Court filed a petition under articles 226 and 227 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act. Section 13 of the Foreign Exchange Management Act provides for the penalty for contravention of the provisions of the Act. Section 13 says that adjudication regarding the contravention of the provisions of the Act has to be done by the adjudicating authority. It is under section 16 that the Government is given the power to appoint adjudicating authority. The contravention of the provisions of the Act is not a matter which a criminal court can take into account and there is no provision in the Act which says that on taking cognizance of the contravention of the provisions of the Act the Magistrate can proceed to take action. The penalty provided in section 13 of the Act has to be imposed by the adjudicating authority after making an adjudication regarding the contravention of the provisions of the Act. The money seized from the petitioner is now in the custody of the court. The money was seized by the police and crime was registered under sections 41(1)(d) and 102 of the Criminal Procedure Code. The Sub-Inspector of Police, Guruvayoor, filed a report stating that during investigation it was found that the currency notes were not counterfeit currency notes and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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