1998 (10) TMI 25 - HC - Income Tax

Summary

Issues Involved:
1. Review of the common judgment in Writ Petitions Nos. 4926 and 17700 of 1996.
2. Compliance with directions given in the original judgment.
3. Alleged violation of Article 21 of the Constitution of India.
4. Legality of the search and seizure conducted by police officials.
5. Return of articles and cash seized by the police.
6. Award of compensation for alleged violation of fundamental rights.
7. Validity of the Income-tax Department's actions under Section 132A of the Income-tax Act.
8. Maintainability of review petitions.
9. Contempt of court for non-compliance with the judgment.

Issue-wise Detailed Analysis:

1. Review of the Common Judgment:
The review petitions were filed by various respondents, including the Commissioner of Police, Hyderabad, and other police officials, seeking a review of the common judgment delivered by the court in Writ Petitions Nos. 4926 and 17700 of 1996. The court took up all review petitions and contempt cases together for disposal by a common order.

2. Compliance with Directions:
The contempt cases were filed by the writ petitioner, alleging non-compliance with the directions given in the original judgment. The court examined whether the directions to return the seized articles were followed and whether compensation awarded was justified.

3. Alleged Violation of Article 21:
The petitioner alleged that the police officials violated his right under Article 21 of the Constitution by unlawfully entering his residence, seizing various articles, and registering a false criminal case. The court had previously awarded compensation for this alleged violation.

4. Legality of Search and Seizure:
The court examined the legality of the search and seizure conducted by the police officials. It was found that the police officials disregarded the provisions of law by not producing the seized articles before the court and bypassing the magistrate's court, which was competent to decide the custody of the properties.

5. Return of Articles and Cash:
The petitioner sought the return of articles and cash seized by the police. The court had directed the return of the seized properties, except for certain items, and awarded compensation for the violation of Article 21. The review petitions challenged this direction, arguing that the court should not have granted relief that was withdrawn by the petitioner.

6. Award of Compensation:
The court had awarded Rs. 5 lakhs as compensation for the violation of Article 21. The review petitioners contended that the court was not justified in awarding compensation after the petitioner confined his relief to the return of the seized articles. The court examined whether it had the power to grant compensation despite the withdrawal of the relief.

7. Validity of Income-tax Department's Actions:
The court examined the validity of the Income-tax Department's actions under Section 132A of the Income-tax Act. The Department had issued notices to the police and obtained possession of the seized valuables. The court found that the Department's actions were unlawful and directed the return of the articles to the petitioner.

8. Maintainability of Review Petitions:
The court considered the maintainability of the review petitions filed by respondents Nos. 3 and 4. It was argued that the review petitions were not maintainable as the direction for compensation was against the first respondent (State Government). The court held that the review petitions were maintainable as the Government could recover the compensation amount from respondents Nos. 3 and 4.

9. Contempt of Court:
The contempt cases were filed alleging non-compliance with the court's direction to return the seized articles. The court found that the delay in compliance was due to the time taken to obtain a certified copy of the judgment and the subsequent stay order. The court directed the Income-tax Department to return the articles forthwith and dismissed the contempt cases.

Conclusion:
The review petitions filed by respondents Nos. 3 and 4 were allowed partly, setting aside the directions regarding the award of compensation of Rs. 5 lakhs. The review petition filed by the Income-tax Department was dismissed, and the contempt cases were also dismissed. The court directed the return of the seized articles to the petitioner, subject to the outcome of the Income-tax Department's enquiry.