Shri Nitin S/O Ashirlal Shah Vs the Assessment Unit

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1 - NC: 2025:KHC-D:1239 WP No. 100278 of 2025

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 23^RD DAY OF JANUARY, 2025 BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 100278 OF 2025 (GM-RES)

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BETWEEN:

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SHRI. NITIN S/O. ASHIRLAL SHAH PROPRIETOR OF BHAGYALAXMMI GOLD PALACE, AGE. 52 YEARS, OCC. BUSINESS, R/O. 1802, 18^TH FLOOR, A-WING, SHANTI KAMAL CHS LTS, DR. B.R.AMBEDKAR ROAD, CHINCHPOKLI, MUMBAI-400012.

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SMT. SANGITA RAJESH CHAWAN PROPRIETOR OF MAHALAXMI JEWELERS, AGE. 56 YEARS, OCC. BUSINESS, R/O. 309, 3^RD FLOOR, ARTHAM BUILDING, 675, VITTHALWADI, SHEKHADE LANE CORNER, MUMBAI-400012.

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…PETITIONERS

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(BY SRI. SANGRAM S. KULKARNI, ADVOCATE)

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AND:

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Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.01.28 15:16:24 +0530

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THE ASSESSMENT UNIT NATIONAL FACELESS ASSESSMENT CENTER, GOVT. OF INDIA, MINISTRY OF FINANCE, NEW DELHI.

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THE INCOME TAX OFFICER (INVESTIGATION) UNIT NO.2, 4^TH FLOOR, LAXMI COMPLEX, SADASHIV NAGAR, BELAGAVI-590001.

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THE STATE OF KARNATAKA R/BY THE INVESTIGATION OFFICER, NIPPANI RURAL POLICE STATION, NIPPANI, DIST. BELAGAVI.

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…RESPONDENTS

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(BY SRI. T. HANUMAREDDY, AGA FOR R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SEC 528 BNSS (SEC 482

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2 - NC: 2025:KHC-D:1239 WP No. 100278 of 2025

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Cr.P.C.) PRAYING TO, ISSUE A WRIT OF CERTIORARI AND QUASH THE IMPUGNED ORDERS PASSED BY THE COURT OF PRINCIPAL CIVIL JUDGE AND JMFC, NIPPANI IN NIPPANI N R P.S.NO.43/2017 DATED 30/5/2017 AND THE ORDER PASSED BY THE COURT OF 7^TH ADDITIONAL DISTRICT AND SESSIONS JUDGE, BELAGAVI SITTING AT CHIKKODI IN CRIMINAL REVISION PETITION NO.280/2017 AND NO.281/2017 VIDE ANNEXURE-A, B AND B1 DATED 23/8/2017 RESPECTIVELY; ISSUE A WRIT OF MANDAMUS DIRECTING TO RELEASE THE SEIZED CASH TO THE PETITIONERS TO ENABLE THEM TO AVAIL THE BENEFITS OF VIVAAD SE VISHWAS SCHEME, 2024 AND ETC.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR

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ORAL ORDER

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On receiving credible information, the vehicle belonging to the petitioners’ employees was intercepted, and upon search, it was discovered that the accused therein were carrying gold ornaments and cash without any supporting invoices. Subsequently, the gold articles were released to the petitioners upon production of invoices. The petitioner then filed an application under Section 451 read with Section 457 of the Criminal Procedure Code (for short, ‘Cr.P.C.’) seeking release of the cash seized from their employees. However, the application was rejected, and the rejection was upheld by the learned District Judge. Aggrieved by the same, the petitioners have approached this Court.

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Heard the learned counsel for the petitioners and the learned Additional Government Advocate for respondent No.3.

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Admittedly, the cash was seized from the possession of the petitioners’ employees, and the employees have raised no

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3 - NC: 2025:KHC-D:1239 WP No. 100278 of 2025

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objection to the release of the cash in favor of the petitioners. An interim order for the release of the seized property will not preclude the respondents from investigating the source of the funds.

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4. The Hon’ble Supreme Court in Sunderbhai Ambalal Desai vs. State of Gujarat (2002) at para 14 has held as follows:

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“In cases where such articles are not handed over either to the complainant or to the person from whom such articles are seized or to its claimant, the Court may direct that such articles be kept in bank lockers. Similarly, if articles are required to be kept in police custody, it would be open to the SHO, after preparing a proper panchnama, to keep such articles in a bank locker. In any case, such articles should be produced before the Magistrate within a week of their seizure. If required, the Court may direct that such articles be handed back to the Investigating Officer for further investigation and identification. However, in no set of circumstances should the Investigating Officer keep such articles in custody for a longer period for the purposes of investigation and identification. For currency notes, a similar procedure can be followed.”

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The Apex Court has categorically held that under no circumstances should the Investigating Officer keep seized articles in custody for an extended period for investigation and identification. The same procedure applies to currency notes.

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In view of the legal principles laid down by the Apex Court in the cited decision, and given that the petitioners have admitted the seizure of cash from their employees and that the investigation will not be adversely affected if the seized amount is

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4 -

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NC: 2025:KHC-D:1239 WP No. 100278 of 2025

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released, the petitioners are entitled to the release of the cash seized. Accordingly, I pass the following:

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ORDER

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i) The petition is allowed.

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ii) The impugned proceedings in CC No.1863/2017 on the application filed under Section 451 read with Section 457 of the Cr.P.C., is hereby set aside.

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iii) The order dated 30.05.2017 passed by the Principal Civil Judge and JMFC Nipapni in NRPS No.43/2017 on the application filed under Section 451 read with Section 457 Cr.P.C., is hereby set aside and the application is allowed.

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iv) The seized cash of Rs.1,57,48,000/- is ordered to be released to the petitioners subject to the petitioners executing indemnity bond for the said sum with two sureties for likesum to the satisfaction of the trial Court.

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Sd/(HEMANT CHANDANGOUDAR) JUDGE

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AC Ct:vh List No.: 1 Sl No.: 16

Shri Nitin S/O Ashirlal Shah v. the Assessment Unit

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Shri Nitin S/O Ashirlal Shah v. the Assessment Unit

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