VINAY AGGARWAL vs. THE CHIEF COMMISSIONER OF INCOME TAX AND ORS

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CWP/10311/2023HC Punjab & HaryanaPHHC01061143202314 December 2023Bench: MR. JUSTICE GURMEET SINGH SANDHAWALIA,MS. JUSTICE LAPITA BANERJI2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that once the cash amount of Rs. 20 lakhs was in the custody of respondents No. 5 & 6 (police authorities), it was their responsibility to keep the amount in safe custody and to return it to the petitioner. The Court noted the admission by the Deputy Superintendent of Police that the sealed parcel was found missing. The reasoning was that the police had taken custody of the seized cash, and its subsequent disappearance from their safe custody rendered them liable for its return. The ratio decidendi is that law enforcement agencies are accountable for the property seized and held in their custody. Accordingly, the writ petition was allowed, and a direction was issued to respondent No. 5/competent authority to remit Rs. 20 lakhs to the petitioner by bank transfer within one month.

What were the facts?

The petitioner, Vinay Aggarwal, filed a writ petition seeking the release of Rs. 20 lakhs in cash seized by respondent No. 6. The cash was recovered on 23.09.2020 and kept in police custody. The petitioner had paid tax on this cash amount, as accepted by the Tax Authorities in an assessment order dated 20.12.2022. The State's reply indicated the amount was with the police during the tax investigation. However, a subsequent reply from the Deputy Superintendent of Police admitted that the sealed parcel containing Rs. 20 lakhs went missing on 28.11.2020. A case was lodged against MHC Kishan Chand for the missing amount.

What were the issues?

1. Whether the police authorities (respondents No. 5 & 6) are responsible for the safe custody and return of the Rs. 20 lakhs cash seized from the petitioner, considering it went missing while in their possession. Assessee's Contention: The petitioner argued that since the Tax Authorities accepted the cash element in the assessment order and he had paid the tax thereon, the seized cash should be released. He relied on the fact that the cash was in the custody of the police. Revenue's Contention: The revenue, through the State's reply and the police's subsequent admission, acknowledged that the cash was in their custody. The police admitted the cash went missing and initiated proceedings against an individual officer for its disappearance.

Which sections of the Income-tax Act were involved?

Section 409 IPC, Section 13 of the Prevention of Corruption Act, 1988

AI-generated summary — verify with the full judgment below

Neutral Citation No. 2023:PHHC:160655-DB

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

(233)

CWP-10311-2023 Decided on : 14.12.2023 Vinay Aggarwal

……Petitioner(s) Versus The Chief Commissioner of Income Tax & others …Respondent(s)

CORAM : HON'BLE MR.JUSTICE G.S. SANDHAWALIA

HON'BLE MS.JUSTICE LAPITA BANERJI

Present: Mr.Rishabh Kapoor, Advocate for the petitioner (s).

None for respondents No.1 to 4.

Mr. Arjun Sheoran, DAG, Punjab, for respondents No.5 & 6.

***** G.S. Sandhawalia, J. (Oral)

The innocuous prayer made in the present writ petition, filed under Article 226/227 of the Constitution of India, is to release the cash seized by respondent No.6 amounting to Rs.20 lakhs in pursuance of the representation dated 04.04.2023 (Annexure P-3) made to the respondents including the police officials who had kept the same in their safe custody after the same had been recovered on 23.09.2020. 2.

The petitioner’s case is that the Tax Authorities had also accepted the cash element while passing an order of assessment dated 20.12.2022 (Annexure P-1) and he had paid the tax of Rs.7,07,690/- on 29.03.2022 (Annexure P-2) and therefore, he had sought the release of the cash. 3.

In the reply filed by the State, it is submitted that the amount was lying with the police authorities during the pendency of the investigation by the Tax Authorities and had been entrusted to the Station House Officer, Police Station Jandiala, Amritsar (Rural) on 23.09.2020 and they had sealed it and kept the same.

SAILESH RANJAN 2023.12.16 17:08 I attest to the accuracy and authenticity of this order/judgment Chandigarh

(233) CWP-10311-2023

-2-

Apparently, as per the reply filed now by the Deputy Superintendent of Police-respondent No.6, it has been admitted that the sealed parcel of Rs.20 lakhs was found missing on checking done on 28.11.2020. The liability was sought to be imposed upon MHC Kishan Chand who was found liable to be proceeded against under Sectoin 409 IPC read with Section 13 of the Prevention of Corruption Act, 1988 and FIR No.407 dated 29.11.2020 was also lodged. In our considered opinion, once the cash amount of Rs.20 lakhs was in the custody of respondents No.5 & 6, it was the responsibility of the police authorities to keep the amount in safe custody and now to return the same to the petitioner. 5.

Accordingly, in view the above discussion, the present writ petition is allowed and a direction is issued to respondent No.5/competent authority to remit a sum of Rs.20 lakhs to the petitioner by way of bank transfer within a period of one month from today. The petitioner shall supply the details of bank account to which the amount of Rs.20 lakhs is to be credited. 6.

With the above direction, the present writ petition stands disposed of. (G.S. SANDHAWALIA)

JUDGE

(LAPITA BANERJI) 14.12.2023

JUDGE sailesh

Whether speaking/reasoned : Yes No Whether Reportable : Yes No

SAILESH RANJAN 2023.12.16 17:08 I attest to the accuracy and authenticity of this order/judgment Chandigarh

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