Income Tax Dept. Can’t Seize Property from Police via Section 132A | HC

Case Details: Shravan Kumar Pathak vs. State of M.P. - [2025] 175 taxmann.com 894 (Madhya Pradesh)

Judiciary and Counsel Details

• Sanjay Dwivedi, J.
• Sunil Kumar Mishra, Adv. for the Applicant.
• Amit Pandey, Government Adv. & H.S. Gupta, Adv. for the Respondent.

Facts of the Case

The applicant filed a complaint with the police, stating that a theft had occurred in his house, and cash amounting to rupees three crores and four kgs. of gold had been stolen. The police registered an offence against unknown persons and conducted an investigation. The police arrested the accused and recovered the stolen articles (gold and cash) from his possession.

Subsequently, an application under Section 457 of the CrPC was filed by the applicant before the trial Court for the return of the possession of articles seized by the police in his favour. However, the Income Tax Department objected to the application, stating that the applicant had kept such a large amount of cash and gold in his house solely to evade tax liability. Additionally, the Assistant Director of Income Tax requested custody of the articles recovered from the thieves.

The trial Court, on an objection raised by the Income Tax Department, had rejected the application. The matter reached before the High Court.

High Court Held

The High Court held that in a criminal case, if any stolen property is seized by the police from the accused, then the Income Tax Department cannot claim possession over the said seized property by issuing notice under Section 132A for the reason that the same is a separate proceeding and can be initiated only after the Court’s decision.

It is the duty of the Court to see whether the person claiming possession over the seized articles satisfies the Court by producing cogent evidence of his/her ownership or not. In the instant case, the applicant has filed a certificate issued by the Tahsildar and other relevant documents of his title over the same. Therefore, the trial Court was directed to allow the application filed by the applicant, subject to the satisfaction of relevant documents showing his ownership over the seized articles filed along with the application.

List of Cases Reviewed

• Mectec v. State of Madhya Pradesh [MCRC No. 46235 of 2020, dated 13-12-2021][Para 8] Distinguished

List of Cases Referred to

• Mectec v. State of Madhya Pradesh [MCRC No. 46235 of 2020, dated 13-12-2021] (para 5)
• Union of India v. P. S. Janakganj [1990] JLJ 734 (para 8)
• Vindhya Metal Corporation v. CIT [1985] 156 ITR 233 (Allahabad) (para 9)
• Kasinath Rangond Kanade v. State of Kerala [CRL.MC NO. 1742 OF 2024] (para 10)
• Union of India v. State of Kerala [2022] 136 taxmann.com 150/285 Taxman 677/443 ITR 117 (Kerala) (para 10)
• R. Ravirajan v. Sate of Kerala [2023] 155 taxmann.com 670 (Kerala) (para 10).