IMPORTANT POINTS
The release of gold to the first respondent in the latter Crl.M.C. would not in any way affect the power of Income Tax Authority to continue with the proceedings under Section 132A of the Income Tax Act and also the right to realise the amount due to Government, if any, as income tax from him out of the guarantee.

ORDER :

Since these Criminal Miscellaneous Cases have matrix from Annexure-V common order in C.M.P.Nos.3644 & 3834 of 2008 in Crime No.51 of 2008 of South Railway Police Station these matters are taken up for joint consideration and disposal. To be precise, Crl.M.C.No.484 of 2010 is directed against the order in C.M.P.No.3644 of 2008 filed by the Income Tax Department and Crl.M.C.No.675 of 2010 is directed against the order in C.M.P.No.3834 of 2008 filed by the first respondent in the said Crl.M.C. In fact, both the aforesaid CMPs were disposed of along with C.M.P.No.3628 of 2008 as per order dated 23.6.2009 by the Court of Judicial First Class Magistrate-I, Ernakulam as per Annexure-V order. The bone of contentions in these cases is 7664.5 grams of gold in the form of gold bars and ornaments seized from accused Nos.1 and 2 in the aforesaid crime, on 21.11.2008. The Intelligence Officer attached to the Department of Commercial Taxes was the petitioner inC.M.P.No.3628 of 2008. The said petitioner and the petitioner in the captioned Criminal Miscellaneous Case viz., the Income Tax Department alleged that those goods were transported without any valid documents to show their ownership. Further, it is alleged that the tax due to the State of Kerala was not paid by the accused in relation to the gold ornaments. In the said circumstances, to initiate the proceedings under the Kerala Value Added Tax Act petitions were filed by them to have custody of the gold ornaments produced in Crime No.51 of 2008. In fact, C.M.P.Nos.3628 and 3644 of 2008 were filed in that regard. The first respondent in the latter Crl.M.C. filed C.M.P.No.3834 of 2008 and expressed his willingness to furnish guarantee for the gold seized from accused Nos.1 and 2 on 21.11.2008 raising the contention that it belonged to him. Evidently, all the aforesaid C.M.Ps were filed under Section 451 Cr.P.C. for the purpose of getting interim custody of the aforesaid quantity of gold. In C.M.P.No.3644 of 2008 the Department of Income Tax contended that the accused persons did not disclose the source of income by which the gold ornaments were purchased and therefore, they claimed for custody of the gold ornaments for the purpose of enquiry under the provisions of the Income Tax Act. To lend support to the claim for interim custody the first respondent in the latter Crl.M.C. produced 9 documents before the court below. After hearing the three petitions they were disposed of as per Annexure-V order as hereunder:-

“(1) 7664.5 grams of gold seized by the Railway police in crime 51/08 will be released on interim custody to the petitioner in CMP.3834/08 (Lalit Kumar Bhagchand Mehta @ Lalit B.Mehta) on condition tha the shall furnish security for 90% of the value of the said gold, as per the value of gold on the date of furnishing security as guarantee for realisation of Income Tax due to the Government, if any.

(2) The Income Tax Authority will have the right to realize the amount due to the Government, if any, as income tax from the said Lalit B.Mehta, from the said guarantee.

(3) The release of the gold to the Lalit B.Mehta will not in any way affect the power of Income Tax Authority to continue with the proceedings u/s.132A of the Income Tax Act.

(4) The Sales Tax Authority will have the right to realize the tax amount, if any, due to the State from the guarantee for Rs.2,29,128/- furnished towards the same by Lalit B.Mehta.

(5) The said Lalit B.Mehta shall produce the gold, in the same condition, as and when required by this court.

(6) The petitioner shall execute a bond equivalent to the value of the gold ornaments with two solvent sureties each for the like sum.”

It is aggrieved by the orders in C.M.P.Nos.3644 and 3834 of 2008 that the aforementioned Crl.M.C.s were filed by the Income Tax Department. Various contentions have been raised by the petitioner in these Crl.M.Cs and also the first respondent in the latter Crl.M.C. Though notice in this proceedings was served on respondents 2