Setback for CPI(M) as Kerala HC refuses to intervene in IT Dept’s seizure of Rs 1 crore

Kochi, May 2 (IANS) In a setback to the ruling CPI(M), the Kerala High Court on Friday declined to interfere in the Income Tax Department’s seizure of Rs 1 crore from the party’s Thrissur District Committee account at the Bank of India’s Thrissur branch.

The seizure took place on April 30, 2024, when the money was brought to be deposited back into the account, which had earlier been frozen by the IT department.

The account was frozen citing discrepancies between the party’s filed annual returns and the actual account details.

The party’s former district secretary, M. M. Varghese, had challenged the department’s action in the court.

However, the High Court observed that the materials presented did not suggest any malafide intent by the authorities.

“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. Considering the scope of interference under Article 226 with a proceeding under Section 132 of the Act, this Court is of the view that the search and seizure proceedings initiated by the respondents do not warrant any interference at this juncture,” the Court said.

The Court also noted that there was prima facie evidence suggesting the bank account was not disclosed in the party’s returns.

On the day of the seizure, Varghese reportedly told IT officials he had come to deposit the unspent portion of earlier withdrawn funds, but was asked to produce documentation regarding the money’s source.

Earlier, in the first week of April — just ahead of the Lok Sabha elections — the IT department had frozen the CPI(M)’s Thrissur district account, citing its omission from the party’s annual returns.

Reports indicate that the account held around Rs 4.8 crore, of which Rs 1 crore was withdrawn before the freeze.

–IANS

SG/SKP