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Issues:
1. Seizure of cash from a passenger at the airport. 2. Legal validity of the seizure and subsequent actions by authorities. 3. Claim of undisclosed income by the Income-tax Department. 4. Request for return of seized amount or adjustment towards tax arrears. Issue 1: Seizure of cash from a passenger at the airport The petitioner, a passenger traveling from Trivandrum to Madras, had cash amounting to Rs. 11.75 lakhs seized by the first respondent, a Circle Inspector of Police, Airport Security, after being directed to open his baggage at the domestic airport. The cash was part of a sale consideration received by the petitioner from Deedi Automobiles, as per exhibit P-1 agreement. The seizure was followed by involvement of customs and Income-tax Officers, resulting in the money being taken into possession by the Income-tax Department based on exhibit P-2 panchanama. Despite explanations provided by the petitioner, the cash remained seized, leading to the legal dispute. Issue 2: Legal validity of the seizure and subsequent actions by authorities The counter affidavit by respondents Nos. 2 and 3 claimed that the seized money was suspected to be undisclosed income of Deedi Automobiles, thus justifying the retention of the cash until proceedings against Deedi Automobiles were completed. However, the court found that the seizure was based on a legal misconception, as the petitioner had validly received the amount under a genuine agreement. The court emphasized that the Department's suspicion regarding the vendee's undisclosed income should not lead to action against the petitioner, who had legitimately sold his property for a valuable consideration. The court cited a relevant case law to support its findings and concluded that the seizure was unjustified. Issue 3: Claim of undisclosed income by the Income-tax Department The Income-tax Department alleged that the seized amount was undisclosed income of Deedi Automobiles, not the petitioner. However, the court noted that the petitioner had disclosed the source of the money seized, and there was no dispute between the petitioner and Deedi Automobiles regarding the transaction. The court emphasized that the Department's focus should be on the vendee's undisclosed income, not on the petitioner who had lawfully received the money. Issue 4: Request for return of seized amount or adjustment towards tax arrears The petitioner sought the return of the seized amount or its adjustment towards his tax arrears. The court allowed the petition, quashed the order of the Income-tax Department, and directed respondents Nos. 2 and 3 to return the amount of Rs. 11.75 lakhs to the petitioner or adjust it towards his income-tax arrears. The court specified that the amount would bear interest at the rate of 19.5% from the date of seizure until payment, ensuring prompt resolution of the matter. This detailed analysis of the judgment highlights the circumstances of the cash seizure, the legal validity of the actions taken by authorities, the claim of undisclosed income, and the resolution of the petitioner's request for the return of the seized amount or its adjustment towards tax arrears.
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