Various central government agencies like the Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI), and the Income Tax Department often seize assets like cash, gold, vehicles and real estate during legal proceedings.
A recent question in the Lok Sabha highlighted concerns regarding the unsold seized assets, their depreciation over time, and the challenges of maintaining them. Here’s what the government had to say in response.
Steps taken for disposal of seized assets
In reply to a query by parliamentarian Parshottambhai Rupala, Minister of State for Finance Pankaj Chaudhary explained that the government has provisions for disposing of certain types of seized properties under existing laws.
“The Prevention of Money-Laundering Act and its associated rules allow for the disposal of movable properties that are prone to natural decay or where maintenance costs exceed their value,” he stated. The ED is empowered to act in such cases.
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Similarly, under Section 110(1A) of the Customs Act, 1962, the government can authorize the immediate disposal of perishable or hazardous goods, or goods that depreciate in value over time. Notified items like gold, foreign currency, electronic goods, and liquors are included in this category. The process is governed by the Disposal Manual, 2019, and related legal provisions.
Customs and Narcotics: Specific provisions
For narcotics and psychotropic substances, Section 52(A) of the NDPS Act allows the government to notify certain items for early disposal due to their hazardous nature or storage constraints. Provisions also exist for the provisional release or attachment of goods under the Customs Act, ensuring revenue protection while legal proceedings are pending.
Income Tax Department’s approach
The Income Tax Department manages seized assets as per the Second Schedule of the Income Tax Act, 1961.
“Systems are in place for the recovery of tax dues through attachment and sale of seized assets,” the Minister stated. However, perishable goods or stock-in-trade are typically not seized. Guidelines are regularly issued by the Central Board of Direct Taxes (CBDT) to ensure timely disposal of attached or seized properties.
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Future plans for rule amendments
Responding to a query on whether rules will be amended to allow prompt sale of assets and potential refunds with interest if litigation outcomes favor the affected party,
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