2016 (3) TMI 757 - HC - Income Tax

Warrant of authorization under section 132-A (1) - seeking release of such assets from police - application for release of money before Magistrate/Session Court under provisions of Cr.P.C. - Held that - Section 132 (5) has specifically been omitted w.e.f. 1.6.2002 but it was existing when proceedings of case in hand were initiated, hence its subsequent omission would not be affected. On a reading section 132-A (1) (c), 2 and 3 read with section 132(5) of Act 1961, I clearly of opinion, if any assets has been seized by Police Officer, same can be requisitioned by Authorized Person under section 132A and when amount is remitted and delivered to Authorized Person of Income Tax department, it would be deemed to be a seizure of assets under sub-section (1) of Section 132A by Requisitioned Officer and will be governed by other provisions of Act 1961. At the time when application was filed by opposite party-1 and 2 before Magistrate, Competent authority has already requisitioned assets under section 132A from Police officials, who had thereafter delivered the same to competent authority of Income Tax department. So there was no occasion to seek release of such assets from police and that too without impleading Income Tax Department. Money so seized can be released by competent authority under provisions of Act 1961 Thus no application for release of money before Magistrate/Session Court under provisions of Cr.P.C. was maintainable.

Summary

Issues:
1. Seizure of money by police during routine vehicle checking.
2. Requisition of the seized money by the Income Tax Department.
3. Application for release of money under Motor Vehicles Act.
4. Jurisdiction of the Magistrate in releasing the assets.

Seizure of Money by Police:
During routine vehicle checking, the police found a sum of Rs. 1,85,000 with an individual traveling on a motorcycle. The individual claimed the money belonged to his uncle and was meant for someone else. However, further investigation revealed discrepancies in the individual's statement regarding the intended recipient of the money.

Requisition by Income Tax Department:
Upon the seizure of the money by the police, the Income Tax Department was informed. Subsequently, a warrant of authorization was issued under the Income Tax Act, authorizing officers to requisition the seized amount. The money was then remitted to the Income Tax Department, and further proceedings were initiated under the Income Tax Act, including issuing notices and passing orders under relevant sections.

Application for Release under Motor Vehicles Act:
The individuals from whom the money was seized filed an application for release of the assets under the Motor Vehicles Act. The Additional Chief Judicial Magistrate initially rejected the application, citing that the assets had been requisitioned and seized by the Income Tax Department, thus falling outside the Magistrate's jurisdiction. However, the Sessions Judge overturned this decision and directed the return of the money to the individuals.

Jurisdiction of the Magistrate:
The revising authority analyzed the relevant sections of the Income Tax Act, particularly Section 132A and 132(5), to determine the authority for releasing seized assets. It was concluded that once the Income Tax Department had requisitioned the assets seized by the police, the Magistrate had no jurisdiction to entertain an application for release. Therefore, the Sessions Judge's decision to release the money was deemed unsustainable, and the revision was allowed, setting aside the Sessions Judge's order.

This detailed judgment from the Allahabad High Court clarifies the legal procedures surrounding the seizure of assets by different authorities and the subsequent requisition and release processes under the Income Tax Act and the Motor Vehicles Act. It highlights the importance of understanding the specific jurisdiction of each authority involved in such cases to ensure appropriate legal actions are taken.