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Srinivasan and anr. Vs. Deputy Superintendent of Police and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberCriminal Revision Case No. 1133 of 1971 and Criminal Revision Petition No. 1099 of 1971
Judge
Reported in[1973]91ITR308(Mad)
ActsIncome Tax Act, 1961 - Sections 132; Code of Criminal Procedure (CrPC) , 1898 - Sections 523; Indian Customs Act, 1962 - Sections 100; Gold (Control) Act, 1968 - Sections 66
AppellantSrinivasan and anr.
RespondentDeputy Superintendent of Police and ors.
Appellant AdvocateA. Raghunathan, Adv.;Addl. Public Prosecutor and ;K. Alagumalai, Adv.
Respondent AdvocateC.K. Venkata Narasimha, Special Public Prosecutor for 2nd respondent (Income-tax Officer) and G. Ramaswamy, Central Govt. Public Prosecutor, for 3rd respondent (Central Excise)
Cases ReferredCentral Excise v. L. Kashi Nath
Excerpt:
.....in respect of gold provisions of act have been contravened - as such neither customs officer nor gold control officer is entitled to seize transistor and gold articles - held, magistrate was wrong in holding that customs officer and gold control officer were entitled to possession of transistors and jewels. - - 39,000 (rupees thirty-nine thousand only) and one national transistor of japanese origin seized from them have been handed over to the court for safe custody, it is requested that the above property except those involved in the above crime number may kindly be made over to this department for taking necessary action under the provisions of the gold (control) act, 1968, and the customs act, 1962.'10. it is significant that in this petition no reference has been made to the..........praying for the delivery of the amount of rs. 39,880 to him. the superintendent of central excise, gold control unit. coimbatore, filed an application before the magistrate for return of the gold ornaments, the primary gold weighing over 222 grams and the national transistor of japanese origin. the learned sub-magistratedismissed the applications filed by the petitioners and directed the cash to be handed over to the income-tax department and the gold jewels and primary gold and transistor to he handed over to the superintendent of central excise, coimbatore. it is against this order that the present revision has been filed.2. the question arises as to who is the person entitled to possession of the articles in court deposit within the meaning of section 523, criminal procedure code. so.....
Judgment:
ORDER

Maharajan, J.

1. On September 3, 1971, the Deputy Superintendent of Police, Coimbatore City, claiming to have received credible information that Srinivasan and Sampath Kumar, the revision petitioners, were habitually dealing in stolen properties in the form of gold jewels of high value concerned in several burglaries and thefts committed in Coimbatore and its suburbs, went to the house of the petitioners at No. 523, Big Bazaar Street, Coimbatore, and made a search between 6 p.m. and 10 p.m., after sending intimation to the Town Sub-Magistrate, Coimbatore. During the search, 52 items of jewellery, a foreign transistor, a khaki cloth bag and Rs. 39,880 in cash were recovered from the house of the petitioners. The petitioners were arrested and produced before the City Sub-Magistrate, Coimbatore, along with the seized articles. On September 8, 1971, they were released on bail. Subsequently, on September 13, 1971, the detective inspector, Madras, went to Coimbatore, and arrested the petitioners and produced them before the Deputy Commissioner, Crimes, Madras, as he suspected them of having committed an offence. This court directed the release of the petitioners on bail with effect from October 12, 1971. Subsequently, despite the investigation conducted by the city police and the Coimbatore police, no offence cognizable by the police was found to have been committed by the petitioners and the police refrained from laying any charge-sheet against the petitioners. Thereupon, the petitioners filed a petition before the Sub-Magistrate, City I, Coimbatore, under section 523, Criminal Procedure Code, for return of the seized articles. At that stage, the Income-tax Officer, Coimbatore Division, filed a petition under Section 523, Criminal Procedure Code, praying for the delivery of the amount of Rs. 39,880 to him. The Superintendent of Central Excise, Gold Control Unit. Coimbatore, filed an application before the Magistrate for return of the gold ornaments, the primary gold weighing over 222 grams and the National Transistor of Japanese origin. The learned Sub-Magistratedismissed the applications filed by the petitioners and directed the cash to be handed over to the income-tax department and the gold jewels and primary gold and transistor to he handed over to the Superintendent of Central Excise, Coimbatore. It is against this order that the present revision has been filed.

2. The question arises as to who is the person entitled to possession of the articles in court deposit within the meaning of section 523, Criminal Procedure Code. So far as the cash amount is concerned, I think the order of the court below directing it to be paid into the hands of the income-tax department is correct. Under Section 132 of the Income-tax Act, the Commissioner of Income-tax, Madras-II, has authorised the Income-tax Officer, Coimbatore City, to seize the amount of Rs. 39,880 from court deposit. He has said in his authorisation that, he had reason to believe that the said sum of Rs. 39,880 represents wholly or partly income which has not been disclosed by the petitioners for the purpose of the Indian Income-tax Act. The material upon which he entertained his reason for his belief consisted of : (1) the circumstance that when the police seized the amount, there were no accounts with the petitioners, which could explain the source of the said sum of money; (2) the petitioners who were not income-tax assessees, were unable to explain the possession of the sum when questioned by the police ; and (3) on being contacted by the officials of the income-tax department, the petitioners were unable to give any explanation about the circumstances in which they came to possess the said sum. It is, therefore, clear that there was sufficient material upon which the Commissioner found that he had reason to believe that the sum of Rs. 39,880 represented undisclosed income of the petitioners. Normally, when no cognizable offence is made out by the police, the person entitled to the amount would be the person from whom it was seized by the police. But, where the Income-tax Officer is entitled under the law to seize the amount, he would be the person entitled to the possession of the amount in court custody. It has been held by the different High Courts in India that it would be an empty formality in the face of an application moved by the Income-tax Officer for delivery of the property to him, to have the property delivered to the persons from whom the police seized the same, and then allow the Income-tax Officer to seize it from those persons at the gate of the Magistrate's court. I have held in Criminal Revision Case No. 1088 of 1970 (Mohammed Kunhi v. Mohammed Koya, Since reported in : [1973]91ITR301(Mad) ) that the power of seizure can be exercised even though the seizure is not preceded by a process of laborious search, and that the dictionary meaning of the word ' search ' being 'Hook for ' or ' seek out', the intended seizure by the Income-tax Officer of the amount in court deposit fulfils the pre-condition of search. The order of the court below in respect of the delivery of the cash amount to the Income-tax department is, therefore, confirmed.

3. As regards the primary gold seized from the petitioners, it is conceded by the learned counsel for the petitioners themselves that the possession thereof by the petitioners is a violation of the provisions of the Gold (Control) Act, and that the Superintendent of the Central Excise, Gold Control Unit, is entitled to seize the same.

4. As regards the gold jewels, the case of the petitioners is that they are brothers and undivided members of a Hindu coparcenary consisting of themselves, their father, mother, two elder brothers, one grandmother, one younger sister and four wives of the sons of the family. It is also their case that the jewels belong to the different family members of the coparcenary. Under Section 100(1) of the Indian Customs Act:

' If the proper officer has reason to believe that any person to whom this section applies has secreted about his person, any goods liable to confiscation or any documents relating thereto, he may search that person.'

7. Section 100(2) of the Act says:

' This section applies to the following persons, namely:--

(a) any person who has landed from or is about to board or is on board any vessel within the Indian Customs waters ;

(b) any person who has landed from or is about to board, or is on board a foreign-going aircraft;

(c) any person who has got out of, or is about to get into, or is in, a vehicle, which has arrived from, or is to proceed to any place outside, India;

(d) any person not included in Clauses (a), (b) or (c) who has entered or is about to leave India ;

(e) any person in a customs area.'

8. It has been authoritatively held that for a seizure to be legal, the seizing officer should have a reasonable belief at the point of seizure-vide Collector of Customs v. Sampathu Chetty, : 1983ECR2198D(SC) , M. G. Abrol v. Amichand Vallamji, : AIR1961Bom227 , Bhoormal Premchand v. Collector of Customs, : AIR1967Mad39 and Vasantlal Ranchhoddas Patel v. Union of India, : AIR1967Bom138 .

9. Section 66 of the Gold (Control) Act, 1968, provides :

' (1) If any Gold Control Officer has reason to believe that in respectof any gold any provision of this Act has been, or is being, or is attemptedto be, contravened, then, he may seize :--

(a) such gold along with the package, covering or receptacle, if any(and the contents thereof), in which the gold is found ;

(b) any other goods in which any quantity of such gold has been mixed.'

9. This section also lays down that the pre-condition of seizure is the existence in the mind of the Gold Control Officer of a reason to believe that in respect of any gold any provision of this Act has been or is being or is attempted to be contravened. If no such belief exists, the Gold Control Officer would have no power to seize. A Division Bench of the Allahabad High Court has held in Collector, Central Excise v. L. Kashi Nath, Jewellers, : AIR1972All231 . that the section does not permit an indiscriminate seizure with a view to fishing out material to form a belief and justify it by reasons culled therefrom and that the belief must be of an honest and reasonable person based upon reasonable grounds. What happened in this case was that after the police registered Crime No. 1822 of 1971 against the petitioners under sections 413 and 414, Indian Penal Code, and after they found that neither of the offences had been made out, they automatically transferred the crime number to the Gold Control Unit on October 13, 1971, for ' thorough investigation by the Superintendent, Gold Control Section '. The Superintendent, Gold Control Unit, in his application to the court below, did not say that he had any reason to believe that the petitioners had violated any provision of the Gold Control Act. What he said was as follows :

' Whereas the Inspector of Police, Crime Branch, Coimbatore, has transmitted a copy of F.I.R. relating to Crime No. 1822/71 dated September 3, 1971, of B-l Coimbatore, with connected records with his letter dated October 13, 1971, addressed to the Assistant Collector of Central Excise, Coimbatore, for taking necessary action against the offenders, Srinivasan and Sampath Kumar, s/o. Adhinarayanan Chetti, under the Gold (Control) Act and whereas it is reported that the property involved in the above case, viz., gold ornaments and primary gold weighing over 222 sovereigns, Indian Currency Rs. 39,000 (rupees thirty-nine thousand only) and one National Transistor of Japanese origin seized from them have been handed over to the court for safe custody, it is requested that the above property except those involved in the above crime number may kindly be made over to this department for taking necessary action under the provisions of the Gold (Control) Act, 1968, and the Customs Act, 1962.'

10. It is significant that in this petition no reference has been made to the department having entertained even a suspicion against the petitioners, much less a reason to believe that the petitioners were involved in smuggling goods in contravention of the Customs Act or in violation of the provisions of the Gold (Control) Act. It appears as though the police, who were discomfited by their inability to prosecute the petitioners for offences under the Indian Penal Code, automatically transferred the crime number tothe Superintendent of Gold Control Unit, so that he might investigate if the petitioners had committed any offence under the Customs Act or the Gold (Control) Act and the Superintendent, without entertaining any reason to believe that the petitioners have committed any violation of either Act, mechanically asked the court to return the jewels to him. In the absence of such belief and in the absence of any reason for such belief, it is clear that neither the Customs Officer nor the Gold Control Officer is entitled to seize the transistor and the gold articles other than the primary gold which even, according to the petitioners, the Gold Control Officer is entitled to seize. The resulting position is that the Magistrate was wrong in holding that the Customs Officer and the Gold Control Officer are entitled to the possession of the transistor and the jewels in question. I set aside the order of the court below in this respect and direct that the transistor and all the gold articles, other than the primary gold, seized from the petitioners be returned to them. As I have already observed, the order of the lower court regarding the delivery of cash to the income-tax department will stand confirmed.

11. The criminal revision case is ordered accordingly.


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