The court reaffirmed the criteria for property seizure under criminal procedure and the necessity of reconsidering custody of cash when no formal proceedings for tax realisation are initiated.

ORDER

The petitioner, a resident of Tamil Nadu, claims to be engaged in the business of purchase of gold ornaments and ingots from various sources. According to the petitioner, on 25.10.2024, he had travelled to Malappuram with the intent of purchasing certain amount of gold offered for sale. En route, he was stopped by the police and a sum of Rs.16,00,000/-, kept in his possession for the purpose of business was seized and produced before the Judicial First Class Magistrate Court-I, Tirur. Subsequently, petitioner was released and no crime was registered with respect to the seizure of cash. Petitioner therefore sought release of the cash seized from his possession by filing a petition under Section 451 Cr.P.C. To prove his claim that he was carrying legal money, petitioner produced certain documents, including his income tax returns. The Income Tax Department opposed the petition and stated that the seized cash was not accounted. It was submitted that the amount of tax assessable on such income, along with interest and penalty leviable, are required to be adjusted from the seized cash, after completion of the assessment and penalty proceedings. Based on the objection and finding the total income of the petitioner shown in his IT Returns for the year 2023-24 to be Rs.4,64,000/- only, the petition for interim custody of the cash was dismissed. Hence, this Crl.M.C.

2. Heard, learned counsel for the petitioner, the learned Public Prosecutor and the learned Standing Counsel for the Income Tax Department.

3. Indisputably, the police seized cash from the petitioner's possession in purported exercise of the power under Section 102 (1) of the Cr.P.C. A perusal of section 102(1) will show that seizure under the provision can be effected when any property is alleged or suspected to have been stolen, or if the property is found under circumstances which create suspicion of the commission of any offence. In the petitioner's case, apart from seizing the cash, nothing further has been done by the police. In fact, the police did not even filed objection to the petition seeking interim custody. The only reason for dismissing the petitioner's application is the objection of the Income Tax Department that the unaccounted money seized is assessable to tax. Pertinently, no proceeding has been initiated by the Income Tax Department for realisation of the tax till date. The petitioner had produced certain documents to substantiate his claim for interim custody. Some more documents are produced in this Crl.MC. Taking all the above factors into consideration, I am of the opinion that the petition for interim custody is liable to be reconsidered. For that limited purpose, the impugned order is also set aside.

In the result, the Crl.M.C is allowed. Annexure A12 order is quashed and the Judicial First Class Magistrate-I, Tirur directed to pass fresh orders on CMP No.4948 of 2024, adverting to the factors mentioned above.