Dilavarsinh Harisinh Zala Vs PCIT (Gujarat High Court)
₹5.68 Crore Seized, Ownership Established-Yet Cash Not Released: Gujarat High Court Refers Section 132B Dispute to Larger Bench
Does seized cash have to be released after 120 days if the Assessing Officer has not decided an application under Section 132B? Earlier Gujarat High Court decisions answered that question in favour of release where a timely application remained undecided. In Dilavarsinh Harisinh Zala v. Principal Commissioner of Income Tax, R/Special Civil Application No. 8681 of 2026, judgment dated 24 September 2026, a Division Bench has questioned that approach and referred the issue to a Larger Bench. The present judgment is therefore a reference order, not a final ruling settling the 120-day issue.
The dispute concerns ₹5,68,37,500 seized on 10 May 2024 from the Ahmedabad premises of M/s Prime Enterprise, an Angadiya firm. Dilavarsinh Harisinh Zala claimed that the cash belonged to him and had been placed with the firm for safe custody and payments connected with his agricultural produce trading business. Separate proceedings were initiated under the Prohibition of Benami Property Transactions Act. On 30 December 2025, the Benami authority concluded that ownership of the cash was established and dropped those proceedings. Relying on that order, Zala applied on 28 January 2026 for release of the money under Section 132B of the Income-tax Act.
