1979 INSC 0290
                                                 Mohammad Kunhi

                                                           Vs

                                           Mohammad Koya and Others

                                          Criminal Appeal No. 2 of 1973

                           (R.S. Sarkaria, P.N. Shinghal, O. Chinnappa Reddy JJ)

                                                      24.07.1979

                                                     JUDGMENT

CHINNAPPA REDDY, J. ­

1. Mohammad Koya was searched on suspicion by the Railway Police when he alighted at the
Madras Central Station on January 29, 1970 by the West Coast Express. A sum of rupees one lakh
in currency notes of 100 rupee denomination was seized from his person. Mohammad Koya was
arrested and produced before the Second Presidency Magistrate, Madras, who remanded him to
custody. After investigation, the Inspector, Railway Police Madras Central, reported to the
Magistrate that no cognizable offence was disclosed against Mohd. Koya and the proceedings may,
therefore, be dropped. Mohd. Kunhi filed a petition before the Presidency Magistrate claiming that
the money belonged to him and that he had entrusted Mohammad Koya with the money for being
paid to a constituent at Bombay. Mohammad Koya also supported the petition filed by Mohammad
Kunhi. Meanwhile Income Tax Officer V, Madras, having been duly authorised by the
Commissioner of Income Tax, Madras, Kerala and Bombay, filed an application before the
Presidency Magistrate praying that the amount may be paid to him under Section 132 of the Income
Tax Act as the amount represented the undisclosed income of Mohammad Koya. The learned
Presidency Magistrate reflected the application of Mohammad Kunhi and allowed that of the
Income Tax Officer. A criminal revision petition filed by Mohammad Kunhi in the High Court of
Madras was by Maharajan, J., on October 13, 1972. The present appeal has been filed by
Mohammad Kunhi on a certificate granted by the High Court of Madras under Article 134(l)(c) of
the Constitution. It was brought to the notice of Maharajan, J., at the time of the disposal of the
criminal revision petition, that Mohammad Koya from whom the currency notes were seized had
subsequently been assessed to pay income tax of Rs. 62,375 and a penalty of Rs. 50,000. It is now
brought to our notice and it is not disputed by the learned counsel for the respondents, that the order
imposing the penalty has been set aside on appeal. The present prayer of Mohammad Kunhi is for a
return of the amount in excess of the income tax assessed on Mohammad Koya. The question of law
to decide which the certificate was granted by the Madras High Court has not now been pressed
before us.

2. We do not see how the request of the appellant that the amount in excess of the tax assessed on
Mohammad Koya should be returned to him can be refused. Mohammad Koya has no objection to
this course and the learned counsel appearing for Mohammad Koya has stated so before us. Under
Section 132(5) of the Income Tax Act the Income Tax Officer can only retain the amount sufficient
to satisfy the demand and is bound to release the balance. We, therefore, direct the third respondent
Income Tax Officer to return to the appellant Mohammad Kunhi the amount in excess of the income
tax assessed on Mohammad Koya together with such interest as may be admissible under the
provisions of the Income Tax Act. The appeal is dismissed subject to this direction.
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