Union of India (UOI) and Others vs Ashok Kumar Nahar and Others

This special appeal is directed against the interim order of the learned Single Judge, dt. 26th Nov., 2002.

Briefly stated the facts of the case are that on 14th Aug., 2002, the police seized cash of Rs. 21 lacs from the respondent No. 1 Ashok Kumar Nahar. He was arrested and released on bail. The amount was seized in accordance with the provisions of 102, Cr.PC. The IT Department obtained a warrant u/s 132A of the Act. The learned Magistrate passed an order directing the police to hand over the entire amount to the IT Department. The said order has been challenged by the petitioner in a writ petition under Article 226 of the Constitution of India. Various contentions have been raised before the learned Single Judge. The writ petition has been admitted and is posted for final hearing. By interim order the learned Single Judge has directed the learned Addl. Chief Judicial Magistrate, Jodhpur, to release the entire amount except 30 per cent of the disputed amount on furnishing two sound and solvent guarantors.

It is contended by Mr. Bhandawat, learned counsel for the Union of India, that the learned Single Judge has committed an error in releasing the 70 per cent of the amount on furnishing only the solvent sureties. It is submitted that in view of the provisions of Section 158BFA of the IT Act, the tax authorities are empowered to impose interest at the rate of 2 per cent of tax and also penalty which should not be less than the amount of tax leviable but it shall not exceed three times of the amount of tax leviable. It is submitted that in the instant case the rate of tax u/s 158BC is already 60 per cent but with the insertion of Sub-section (2) to Section 158BFA interest and penalty are further to be imposed and, therefore, the release of 70 per cent of the amount to the assessee-respondent is against the provisions of law. On the other hand, it is submitted by Mr. Vineet Kothari, learned counsel for the respondent, that said provisions are not attracted in the instant case. It is further submitted that this Court will not interfere with the interim order, in special appeal under ordinance 18 of the High Court ordinance.

We have considered the rival contentions. In the facts and circumstances of the case, and keeping in view the provisions of Section 113 of the IT Act we consider it expedient to modify the interim order only to the extent that 30 per cent of the total amount shall be refunded on furnishing the bank guarantee and rest 40 per cent on furnishing two solvent sureties. The interim order of the learned. Single Judge dt. 26th Nov., 2002, is modified as follows :

"Meanwhile, as the money is said to be lying with ACJM, Jodhpur, the ACJM, Jodhpur, will deduct Rs. 6,30,000 and deposit the same with the IT Department Rs. 6,61,500 shall be refunded to respondent Ashok Kumar on furnishing a bank guarantee. The rest of the amount i.e., Rs. 8,08,500 shall be refunded to the respondent Ashok Kumar on furnishing two solvent sureties. The bank guarantee and the solvent sureties shall be to the satisfaction of the Asstt. Director of Income Tax (Inv.) II, Jodhpur."

The special appeal stands disposed of accordingly.