M/S. MECTECH A PROPRIETARY FIRM vs. THE DIRECTOR OF INCOME TAX ( INVESTIGATION) CHHATTISGARH

WPT/31/2026HC ChhattisgarhCGHC01007465202627 July 2026Author: HON'BLE SHRI JUSTICE RAKESH MOHAN PANDEY4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Chhattisgarh disposed of the writ petition. It did not decide on the legality of the seizure or the merits of the claim for release of the cash. Instead, it directed the petitioner to make a representation before the ACIT, Central Circle-2(4) Ahmedabad, along with the relevant documents. The Competent Authority was instructed to consider and decide the petitioner's claim for the release of the seized amount preferably within a period of 30 days from the date of receipt of a copy of the order. The court reserved liberty for the petitioner to pursue this course of action.

What were the facts?

The petitioners, M/s. Mectec, a proprietary firm, and its proprietor Neena W/o Kamlesh Rajnikant Shah, along with two other individuals, filed a writ petition before the High Court of Chhattisgarh. They sought the release of cash amounting to Rs. 4,04,50,000/- seized on information from the police of Rajnandgaon. The petitioners claimed their firm had sufficient cash on hand as of March 31, 2024, and that the seized amount was duly accounted for, with relevant documents produced before the Income-Tax Department. The cash was seized on August 14, 2025, from the employer of the petitioner and subsequently handed over to the Income-Tax Department. A Scorpio vehicle seized concurrently was released on September 17, 2025, but the cash remained unreleased.

What were the issues?

1. Whether the action of the respondents in conducting panchnama and seizing cash amounting to Rs. 4,04,50,000/- from the petitioner firm, based on information from the police, is illegal and contrary to the Income Tax Act, 1961? 2. Whether the respondent authorities should be directed to release and return the seized cash amount of Rs. 4,04,50,000/- to the petitioner firm forthwith, along with interest and costs? Assessee's Contention: The petitioner firm had sufficient cash on hand (Rs. 49 crores as of 31.3.2024). The seized amount of Rs. 4,04,50,000/- was duly accounted for, and all relevant documents were produced before the Income-Tax Department. The seizure and continued retention of the cash are illegal. Revenue's Contention: The assessee belongs to Ahmedabad, and the entire record has been centralized with the Assistant Commissioner of Income-Tax (ACIT), Central Circle-2(4) Ahmedabad. An appropriate decision would be taken by the Competent Authority if the petitioner moves an application before the concerned Officer with relevant documents.

AI-generated summary — verify with the full judgment below

CGHC010074652026

2026:CGHC:32265

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 31 of 2026 1 - M/s. Mectec a Proprietary Firm Its Sole Proprietor Namely Neena W/o Kamlesh Rajnikant Shah Aged About 61 Years At Present R/o Ap06, Suramya Park - Ii, Village Rancharda, District- Gandhi Nagar (Gujarat) Through Its General Power Of Attorney Holder Namely Kamlesh Rajnikant Shah S/o Rajnikant Shah, Aged About 63 Years R/o Ap06, Suramya Park - Ii, Village Rancharda, District- Gandhi Nagar (Gujarat) 2 - Patel Akshay S/o Shailesh Bhai, Aged About 30 Years R/o Chansama, Patan, District-

Patan

Gujarat 3 - Patel Paras S/o Jayanti Bhai, Patel Aged About 36 Years R/o 330 Vrindalaya Residency, Vadodara (Gujarat)

--- Petitioner(s) versus 1 - The Director Of Income Tax ( Investigation) Chhattisgarh Raipur, Nawa Raipur, Atal

Nagar,

District-

Raipur

(C.G.) 2 - Deputy Director Of Income Tax (Investigation - Ii) , 9th Floor Room No. 923, Cbd Building Atal Nagar, Sector- 21, Nawa Raipur , District- Raipur (C.G.) 3 - Union Of India , Ministry Of Finance (Department Of Direct Taxation Finance) New Delhi, Through Its Chairman, North Block, Secretariate Building New Delhi - 110001 NIRMALA RAO

2 4 - Incharge Of Police Station Khairagarh, Rajnandgaon, District- Rajnandgaon (C.G.)

--- Respondent(s) For Petitioner : Shri Manoj Paranjpe, Senior Advocate alongwith Shri Arpan Verma, Advocate. For Respondents No.1 & 2 : Shri Ajay Kumrani, Advocate holding the brief of Shri Amit Chaudhari, Advocate. For Respondent No.3 : Shri Abhishek Banjare, CGC For Respondent No.4 : Ms. Anuradha Jain, Dy.G.A. Hon'ble Shri Justice

Rakesh Mohan Pandey

Order on Board 28.07.2026

The petitioner has filed this petition seeking the following reliefs: “1] That, this Hon'ble Court may kindly be pleased to issue a writ/writs, order/orders, direction/directions and may kindly be pleased to declare the action of the respondents in conducting panchnama and sizing the cash of the petitioner firm amounting to 4,04,50,000/- on the information of the police of Rajnandgaon is illegal and contrary to the provisions contained in the income tax Act, 1961. 2] That, this Hon'ble Court may kindly be pleased to issue a writ/writs, order/orders, direction/directions and the respondent authorities may kindly be directed to release and return the cash amount of Rs. 4,04,50,000/- to the petitioner firm forthwith and along with the interest and heavy cost on the respondents for the illegality committed by them. 3] That, this Hon'ble Court may kindly be pleased to grant any other relief(s), which is deemed fit and proper in the aforesaid facts and circumstances of the case.”

Learned Senior Advocate would submit that the petitioners’ firm had sufficient cash on hand to the tune of Rs.49 crores as on 31.3.2024. He would further submit that on 14.8.2025, the police authorities seized the cash amount of Rs.4,04,50,000/- from the possession of the employer of the petitioner and subsequently, the said amount was handed over to the Income-Tax Department. He would also contend that the Scorpio vehicle bearing registration No.MH12 WZ 0696 was seized and was subsequently released on 17.9.2025. He would submit that the petitioner produced all the relevant documents before the Income-Tax Department to establish that the seized amount was duly accounted for; however, till date, the said amount has not been released.

At this stage, learned counsel for respondents No.1 & 2 would submit that as the assessee belongs to Ahmadabad, the entire record has been centralized with the Assistant Commissioner of Income-Tax (ACIT), Central Circle-2(4) Ahmedabad. He would contend that if the petitioner moves an application before the concerned Officer alongwith the relevant documents and an appropriate decision would be taken by the Competent Authority.

Having considered the submissions made by counsel for respondents No.1 & 2, the present petition is disposed of reserving liberty in favour of the petitioner to make a representation before the ACIT, Central Circle-2(4) Ahmedabad and in turn, the Competent Authority shall consider and decide the claim of the petitioner, preferably within a 4 period of 30 days from the date of receipt of a copy of this order, with regard to release of the seized amount belonging to the petitioner.

Accordingly, the present petition is disposed of.

(Rakesh Mohan Pandey)

Judge Nimmi

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