The Kerala High Court has declined to interfere with the Income Tax Department’s seizure of Rs 1 crore from the bank account of the Communist Party of India (Marxist) [CPI(M)] Thrissur District Committee. The funds were frozen in the Bank of India’s Thrissur branch during the 2024 Lok Sabha election period.
Justice Bechu Kurian Thomas, presiding over the case, ruled that there was no evidence of malafide intent in the department’s action and that the decision to invoke search and seizure powers under Section 132 of the Income Tax Act, 1961 was legally justified. The petition was filed by M. M. Varghese, former secretary of the CPI(M) Thrissur District Committee, under Writ Petition (Civil) No. 19152 of 2024.
The Income Tax authorities had acted based on alleged discrepancies in the party’s annual income tax returns, specifically the non-disclosure of the said bank account. The Court emphasized that it found prima facie material indicating that the bank account in question was not reported in the financial disclosures submitted by the political party.
In his order, Justice Thomas noted, “The pleadings and the materials placed for consideration do not indicate any malafides. Hence, the satisfaction arrived at by the respondents to initiate the search and seizure under Section 132 of the Income Tax Act cannot be held to be perverse or legally untenable.”
Highlighting the limited scope of judicial review under Article 226 of the Constitution, especially in matters related to search and seizure under tax laws, the Court found no compelling reason to intervene in the Income Tax Department’s proceedings at this stage.
A detailed judgment in the matter is expected to follow shortly.