New Delhi: The Centre has come to the rescue of law enforcement agencies like the tax department and Enforcement Directorate (ED), which are faced with a unique situation of holding confiscated currency notes beyond specified limits, by making changes in the law. A notification in this regard has been issued by the Ministry of Finance, allowing agencies such as the Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes (CBIT) and ED to hold banned currency notes.
Under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, banned currency notes beyond a certain limit could be held only by the Reserve Bank, its agencies, or other person authorised by it, and in pursuance of a court order. An individual is not allowed to hold more than 10 banned notes. Besides, not more than 25 such notes can be kept for study, research or numismatics.
According to the finance ministry's notification, law enforcement agencies had seized or confiscated the Rs 500/ 1,000 notes on or before December 30, 2016 (the last day to exchange the banned notes) without specific directions from the court and need to deposit or exchange those on production of the documents authorising the seizure or confiscation. However, there is no provision in the Act to authorise such deposit of the specified bank notes seized or confiscated by the enforcement agencies.
To deal with the difficulty, the government has come out with an order 'Specified Bank Notes (Cessation of Liabilities) Removal of Difficulties Order, 2018' using its power under Section 12 of the Act.