Case Law Details
Union of India Vs State of Kerala (Kerala High Court)
It is true that even while dismissing the application submitted by the petitioner herein, the learned Magistrate ordered to retain 30% of the amount for securing the interest of the Income Tax Department. Apparently, an amount of 30% was fixed under the impression that the same would take care of the amount likely to be payable by the 2nd respondent towards tax element. However, such an exercise is beyond the scope of the jurisdiction under Section 451 of the Cr.PC and was unwarranted. The liability of tax is to be determined by the authorities concerned under the Income Tax Act after completing the proceedings contemplated therein. If it is found that there was an attempt to evade the payment of tax, in addition to the tax liability at higher rates, there are provisions for imposing penalty as well. In such circumstances, the amount actually payable by the 2nd respondent is likely to exceed far beyond 30% of the amount as fixed by the learned Magistrate. In such circumstances, the order to retain 30% of the amount cannot be treated as an order which takes care of the interest of the petitioner herein. It is evident from the facts that, the petitioner was having in his possession, huge amount of cash, which by itself is a violation of the provisions of Income Tax Act. Apart from the above, so far, he failed to explain the source of the said income to the satisfaction of the competent authorities viz. the income tax authorities. In such circumstances, the proper course which should have been adopted by the learned Magistrate is to order the release the said amount to the petitioner herein so as to enable the parties to undergo the procedure contemplated under Sections 132-A, 132-B or 153A of the Income Tax Act as the case may be. It is true that the amount was seized from the 2nd respondent, but by virtue of the provisions of the Income Tax Act, he was bound to disclose the source of the same before the authorities and to pay the tax, as per the rates applicable. Apparently no such exercise is done in this case, at the instance of the 2nd respondent and hence proceedings under section 132-A or 153A are necessitated. Even if the said amount is released to the petitioner herein, it is possible for the 2nd respondent to make a claim of the amount, by following the procedure prescribed in the Income Tax Act. But if the amount is released to the 2nd respondent, it may cause difficulties in implementing the provisions of the Income Tax Act.
In such circumstances, I am of the view that Annexure-B order passed by the learned Magistrate is to be set aside. Accordingly, the common order passed in Crl.M.P.No.384/2017 and Crl.M.P.No.704/2017 on 9.10.2017 by the Judicial First Class Magistrate Court-II, Mananthavady is hereby set aside.
In the result;
i) Crl. M.P.No.384/2017 is dismissed.
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