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TMI Blog2019 (6) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... ive Magistrate, Muzaffarpur and alongside seeks a direction to the respondent authorities especially the Income Tax Officer, QRT (respondent no.6) to release the seized cash which was deposited in the District Treasury at Muzaffarpur but has since been transferred to the Income Tax Department. The petitioner is a proprietorship firm engaged in wholesale trading of ready-made garments having its place of business in Zila Parishad market at Muzaffarpur. The petitioner is registered under the Goods and Service Tax Act, 2017 and is an assessee under the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The complaint of the petitioner is that on 26.3.2019 a Flying Squad under the leadership of respondent no.8 entered his business premises claiming knowledge about huge cash lying with the petitioner which according to them was meant for use in Elections for influencing voters in violation of the Election Laws and Guidelines. The proprietor of the petitioner was shocked because no notice had been received by him in this regard and thus, the authority of the Flying Squad was unknown. The proprietor of the petitioner handed over the cash which was a collection of payments recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grievance raised put the raiding team as well as the Income Tax department on notice seeking their response on the issue. The writ petition was next taken up on 8.5.2019 and when on noting that the exercise was carried out under the guidelines so issued by the Election Commission of India, the Court added the Election Commission of India as respondent no.9 and after serving notice on the retained counsel for the Commission, the matter was posted for 10th May, 2019. When the matter was taken up on 10.5.2019 Mr. Gautam Kejriwal, learned counsel appearing for the petitioner complained that the seizure had been done dehors the guidelines issued by the Election Commission of India and the Income Tax department had taken over the money. Since Mr. Siddhartha Prasad registered appearance for the Election Commission of India, on the same day, the matter was adjourned enabling Mr. Prasad, appearing for the Election Commission of India to file their counter affidavit and in the meanwhile taking note of the stipulations present in Clause 16 the Committee constituted under the guidelines consisting of the Chief Executive Officer, Zila Parishad or the CDO/P D DRDA; the Nodal Officer of Expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Income Tax Department, Mr. Siddhartha Prasad referred to a letter of the Income Tax Officer, IAP cum Officer QRT for Elections, 2019, Muzaffarpur, who vide letter dated 4.4.2019 addressed to the District Magistrate, Muzaffarpur requisitioned the cash amounting to Rs. 26,90,000/- seized from the petitioner, from the custody of the Treasury Officer for its deposit in the "PD account of Principal Commissioner of Income Tax, Muzaffarpur" under warrant of Authorization issued under section 132A of the Income Tax Act, 1961 by the authority of the Income Tax Department (the Principal Director of Income Tax (Investigation), Bihar and Jharkhand. Copy of the said letter is enclosed at Annexure F/9 to the said counter affidavit. According to Mr. Prasad, in view of the position reflecting from the decision of the Committee under the guidelines dated 13.5.2019 at Annexure J/9 and in view of the requisition made by the Income Tax Officer, IAP cum Officer QRT for Elections, 2019 at Annexure F/9 since the seized cash is not connected with election violations, appropriate direction could be issued to the Income Tax Department for release of the cash in question. On a query made from Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Election Expenditure Monitoring issued by the Director General of Income Tax (Investigation), Bengalore. We have heard learned counsel for the parties and have perused the records and we are in no confusion to hold that in view of the conclusion drawn by the three-men Committee constituted under the guidelines of the Election Commission of India, a copy of which is enclosed at Annexure A/9 to the counter affidavit of the Election Commission of India, in accepting the error committed in the seizure of the cash in question and concluding that the seized money had no connection with the Elections which conclusion is accompanied with the recommendation for release of cash by the Income Tax Department, any attempt made by Ms. Sinha to justify either the requisitioning of the cash in question by respondent no.6 vide his letter dated 4.4.2019 at Annexure F/9 or in taking recourse to the provisions of Section 132 of the Income Tax Act or to hold on to the money is absolutely without jurisdiction and without sanction of law because the guidelines nowhere empowers either the Income Tax Department to requisition the cash seized in an exercise conducted under the guidelines of the Electio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind it rather strange that Ms. Sinha while espousing the cause of the Income Tax Department has completely failed to appreciate that neither the seizure was under section 132 of the Act nor the pre-requisite to an exercise of search and seizure under section 132 of the Act were satisfied nor the requisition satisfies the provisions of Section 226(3) of 'the Act', which is the only provision enabling the Income Tax Department to take over the money apart from the search and seizure prescriptions under section 132. That the Committee vide its order dated 13.5.2019 has ordered for release of cash with the recommendation to the Income Tax Department to take consequential action, we hereby direct respondents no. 6 to 8 or the authority found responsible more particularly respondent no.6 under whose requisitional order the money was transferred to the Income Tax Department to forthwith take steps for release of the cash in favour of the proprietor of the petitioner within a maximum period of eight weeks of receipt/ production of a copy of this judgment, failing which the petitioner would be entitled to interest @ 10% on the seized cash payable by the Income Tax Department from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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