PRATAP K POTHEN Vs. CIT

JUDGEMENT

(1.) The petitioner was a passenger bound for Madras from the Trivandrum Domestic Airport in the Jet Airways flight on 1.10.1997. After the baggage of the petitioner was screened through the screening machine at the Domestic Airport, the first respondent Circle Inspector of Police, Airport Security, directed the petitioner to open the baggage. The baggage was opened and an amount of nearly Rs. 6 lakhs, which was kept in the baggage was seized by the first respondent. Thereupon, the petitioner also voluntarily disclosed to the first respondent that another amount of Rs. 5.75 lakhs is also in the possession of the petitioner and the same has been kept in the other baggage which has been sent to the cabin of the Aircraft. Then the first respondent brought the cabin baggage and the same was also opened and cash found in it namely a sum of Rs. 5.75 lakhs was also seized by the first respondent. The petitioner informed the first respondent that a total amount of Rs. 11.75 lakhs which is in his possession is the amount received by him from M/s. Deedi Automobiles, Trivandrum who have purchased the 1/3 share of the petitioner in the 36 cents of land and the building situated therein on the side of the main road near the Ayurveda College, Trivandrum. The petitioner along with his sister who is entitled to another 1/3 share in the aforesaid property have jointly executed Ext. P1 agreement for sale dated 29.9.1997 in favour of Smt. Geetha Jose Thottam, W/o. T.C. Paul, who is a partner of M/s. Deedi Automobiles and the money seized reflects part of the sale consideration received under Ext. P1. As per Ext. P1 agreement, a total of Rs. 25 lakhs has been paid to the petitioner and his sister equally. Thus the petitioner got Rs. 12.5 lakhs out of which he has spent some amount and the balance is Rs. 11.75 lakhs. After the seizure by the first respondent, the petitioner was taken to the Customs Wing of the International Airport at Trivandrum on the allegation that the money possessed by the petitioner was foreign money ( ). The petitioner was questioned by the Customs Officers and the petitioner explained to them that the possession of the aforesaid amount, viz. Rs. 11.75 lakhs by him is absolutely legal and proper. After accepting the explanation furnished by the petitioner, the first respondent was told by the Customs Officers that they have no intention to proceed against him and subsequently the petitioner was brought to the Domestic Airport by the first respondent. However, the Customs Officers informed the Income Tax Department that the petitioner has been detained with the possession of a sum of Rs. 11.75 lakhs. Thereupon, the Income Tax Officers came to the Domestic Airport at Trivandrum and took possession of the entire amount of Rs. 11.75 lakhs possessed by the petitioner on the basis of Ext. P2 Panchanama. Copy of Ext. P1 was also seized by the Income Tax Officers on the basis of Ext. P2. Ext. P3 is the news item appeared in English and Malayalam Dailies relating to this incident Though several requests were made by the petitioner for the return of the money seized from him to respondents 2 and 3, they did not elicit any satisfactory response. On 22.10.1997 the petitioner submitted Ext. P4 representation before the second respondent Commissioner of Income Tax requesting him to transfer the amount of Rs. 11.75 lakhs seized from the petitioner to the file of the Commissioner of Income Tax, Tamil Nadu - IV, Chennai for adjusting the same amount towards the tax arrears due from the petitioner. The request contained in Ext. P4 has been rejected as per Ext. P5 communication by which he was informed "that the seizure of cash has been made in connection with the search in the case of M/s. Deedi Automobiles, Trivandrum and that this cash has been seized as the undisclosed income of M/s. Deedi Automobiles. Therefore, there is no need to transfer this amount to the P.D. account of the Commissioner of Income Tax, Tamilnadu - IV, Chennai." Under the above facts and circumstances, the petitioner has moved this court with the present Writ Petition for the issuance of a writ of certiorari to quash Ext. P5 and for a writ of mandamus directing the respondents to return to the petitioner the amount of Rs. 11.75 lakhs seized from him on 1.10.1997 from the Domestic Airport at Trivandrum with "market rate interest" from 1.10.1997 till date of payment and for other incidental reliefs.

(2.) In the counter affidavit filed on behalf of respondents 2 and 3, the plea set up is that they have reasons to believe that the money seized from the petitioner forms part of the undisclosed income of M/s. Deedi Automobiles and since M/s. Deedi Automobiles is being proceeded against, the money cannot be released to the petitioner till the proceedings are completed.

(3.) Heard learned counsel on both sides. The short question that arises for consideration is whether the impugned order Ext. P5 can be legally sustained and if so, whether the petitioner is entitled to the return of the cash (Rs. 11.75 lakhs) seized from him on 1.10.1997 from the Domestic Airport at Trivandrum at market rate interest ( ) from 1.10.1997 as prayed. In this context, the first and foremost point to be borne in mind is the fact that the money which the petitioner was carrying during his travel from Trivandrum to Madras on 1.10.1997 is the money received by him from M/s. Deedi Automobiles bring part of the sale consideration of petitioner's 1/3 share in the land and the building scheduled to Ext. P1. Ext. Panchanama itself shows that Ext. P1 agreement was seized on 1.10.1997 from the possession of the petitioner at the Airport. The respondents have no case that Ext. P1 is a sham or fabricated document to cover up unlawful transactions. They have also no case that M/s. Deedi Automobiles have any legal claim or right over the amount of Rs. 11.75 lakhs seized from the possession of the petitioner. Ext. P6 disclaimer letter submitted by the Managing Partner of M/s. Deedi Automobiles to the second respondent would prove beyond doubt that they had given a sum of Rs. 12.50 lakhs as advance payment for purchase of the petitioner's 1/3 share in the land and building situated at M.G. Road, Trivandrum which is now under the occupation of M/s. Deedi Automobiles under lease arrangement. The payment in question is supported by Ext. P1 agreement for sale as already noted. M/s. Deedi Automobiles have disclaimed their right over the money by issuing Ext. P6. In this connection, it may be noted that the petitioner is an assessee on the file of the Income Tax, Officer, Film Ward II, Chennai and has requested in Ext. P4 representation to the Commissioner of Income Tax that the amount seized from him may be adjusted towards the arrears of income tax due from him. As per Ext. P1 agreement a total of Rs. 25 lakhs has been paid to the petitioner and his sister equally. Thus, the petitioner got Rs. 12.50 1akhs out of which he spent some amount and the balance is Rs. 11.75 1akhs. Since the petitioner has disclosed his source of money seized from him at the time of seizure itself, I do not think that respondents 2 and 3 will be justified in retaining the money on the specious plea that the proceedings initiated against M/s. Deedi Automobiles for suppressing income are still pending. Ext. P5 communication sent to the petitioner by the Income Tax Department would show that the amount has been seized on the ground that it is the undisclosed income of M/s. Deedi Automobiles. The Department has no case that the money seized is the undisclosed income of the petitioner. That apart, there is no dispute whatsoever between the petitioner and M/s. Deedi Automobiles with regard to the money in question.