TMI Blog1982 (1) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Taxes, Assessment, Bangalore Division, Bangalore. The petitioner has asserted that he has filed all the returns due under the law. He has paid all the taxes payable under the Act. It is alleged that on 16th January, 1981, the respondent-Commercial Tax Officer, Intelligence-II, Bangalore, along with a number of officials of his department made a surprise raid on the firm's oil mill, office premises and the residential premises. It is alleged that the respondent arrived at the premises of the firm at about 3 p.m. and left the premises at about 10 p.m. The respondent did not have a warrant of search. The respondent had no authority of law to search or seize. It is also claimed that it has come to the knowledge of the firm that the respondent has not been authorised under sub-section (2) of section 28 of the Act to exercise the powers thereunder. It is also alleged that the respondent had no basis, reason or information against the petitioner to conduct the search and seizure. It is further alleged that the respondent is an authority subordinate to the Assistant Commissioner of Commercial Taxes, the assessing authority in the petitioner's case, and therefore he could not effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1981, to the police station at Hiriyur at about 8 p.m. and at that time certain officials of the commercial tax department came to the police station and they were told to accompany them to the oil mill of Hanuman Traders. They also stated that the two witnesses were asked to sign the mahazar papers and they were asked to be the witnesses and therefore they went in the jeep of the commercial tax department to the oil mill. They have asserted that they had not accompanied the Commercial Tax Officer at the time of the beginning of the search. They have also stated that they are not inhabitants of the locality in which the petitioner's oil mill is situated. 5.. As against these facts asserted by the affidavit of the partner of the firm and the attesting witnesses, the respondent who has entered appearance after notice has filed his statement of objections together with the affidavit of the Sub-Inspector of Police of Hiriyur police station at the relevant time. In the statement of objections the respondent has asserted that the inspection and search commenced at about 3 p. m. on 16th January, 1981. It is also asserted that a partner of the firm Shri M.H. Anjanappa was present at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the police help was sought and the police fetched as there was grave threat to the person of the respondent who who would have been otherwise severely manhandled. It is asserted that on the arrival of the police, peace was restored and the inspection and search was proceeded with resulting in the impugned seizure. 6.. There are certain facts relating to the seized documents and their relevance in the statement of objection. A mere reference to the same is adequate and details are not necessary for the purpose of deciding the matters in issue. 7.. The respondent has further denied that he ransacked the premises of the petitioner-firm as alleged by the petitioner. The allegation that the sister concern's books of account and documents have been indiscriminately seized is also denied. It is on the other hand asserted that the sister concern has the same partners and is situate in the same premises and that the business carried on by both are interlinked. The respondent has further asserted that all documents were seized, scrutinised and examined and only those which were required for further investigation were seized. It is in these circumstances that the respondent states that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year." It is the argument of the learned counsel that having regard to the express language of the above sub-section, the Assistant Commissioner having been conferred the powers of the Commercial Tax Officer, the Assistant Commissioner alone being the assessing authority in the case of the petitioner-firm, he alone was competent to conduct the search and effect the seizure as even the search and seizure under section 28 of Act should be deemed to be proceedings within the meaning of that term occurring in the explanation to sub-section (4)(a) of section 33 of the Act. In other words, the thrust of the argument is that notwithstanding the powers to be exercised by the State Government to empower any officer to enter, inspect, seize and cause production of accounts, once the case is assigned under sub-section (4)(a) of section 3B of the Act to the Assistant Commissioner of Commercial Taxes to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over sub-section (1) of section 28 of the Act, it will have the effect of reading down and rendering otiose part of subsection (1) of section 28 of the Act inasmuch as by so reading, the State Government is denied the power to authorise any officer to cause production of documents, search, inspect and seize the documents in given circumstances. Such a construction would hit the very purpose sought to be achieved by the scheme of the Act. One must not fail to notice that the power of search and seizure is not an ordinary power of the assessing authority. That power when exercised is likely to invade the fundamental rights of the citizens and viewed thus one should not hesitate to hold that section 28 of the Act, in the scheme of the Act, is a special provision which should be given effect to over the general distribution of jurisdiction carried out by the Commissioner under sub-section (4)(a) of section 3B of the Act. I, therefore, have no hesitation to reject the first proposition advanced by the petitioner that the respondent had no jurisdiction to effect the search and seizure. In this connection, I should not fail to notice that it is not disputed by the petitioner that the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of objections that these have been complied with, the learned Advocate-General has made available the records of the case. It is seen from the records that the search was initiated not on mere suspicion but on definite information received by the Deputy Commissioner of Commercial Taxes, Intelligence, South Zone, Bangalore. It is not in public interest to disclose the source of information. But on perusal, I am satisfied that the information furnished to the intelligence wing of the department was sufficient to reasonably come to the conclusion that certain oil mills at Hiriyur which were listed were practising evasion of tax under the Act. Even the mode of evasion was indicated. This information had been received as far back as in September, 1980. It was only thereafter that the respondent after making preliminary investigations, proceeded to record his reasons for forming the belief that some documentary evidence could be obtained if a surprise inspection and search was made of the factory and the business premises of the petitioner. He has recorded that if enquiries were made at the banks, the petitioner who was one of the oil mills referred to in the information received, would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eize whatever is found lying in the premises on a subjective satisfaction that such books of account, documents or registers might be useful to prove the evasion of payment of tax. It may be necessary for the searching officers to scrutinise the accounts, registers or documents which he intends to seize. I may, however, hasten to add that a close examination of each and every document, book or register is neither expedient nor necessary. Nor is it necessary for him to record separate reasons as against every account book, document or register which he intends to seize. The officer may have a broad survey or a broad look over all the documents, registers and accounts, but the reason or reasons which he records must indicate that he has applied his mind and should prima facie disclose that such documents are relevant to prove the suspected evasion of tax, fee or other amount due from the dealer under the Act." It is therefore argued by Mr. Gandhi that in the instant case the search has been without any objective, that the seized documents including torn pieces of papers have no relevance whatsoever to the assessment proceedings of the petitioner and therefore the fourth ingredien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Courts and the Supreme Court to support the proposition that even if the witnesses were not of the locality, it would only make the search and seizure irregular but not illegal. It is unnecessary to go into the details of the decisions. Even under the Criminal Procedure Code [subsection (4) of section 100 of the Criminal Procedure Code] now it is well-settled that if search witnesses are not of the locality, the search becomes irregular and not illegal. The emphasis in the Criminal Procedure Code is on the independent character of the witnesses and therefore presence at the time of search and not so much on the locality from which they hail. In this view of the matter, the best that the petitioner could claim is that the search was irregular and no more. It is useful to notice the decision of the Supreme Court in the case of Radha Kishan v. State of Uttar Pradesh AIR 1963 SC 822. In the said case while construing the provisions of sections 103 and 165 of the Code of Criminal Procedure, the Supreme Court observed as follows: "It may be that where the provisions of sections 103 and 165, Criminal Procedure Code, are contravened the search can be resisted by the person whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leads to the conclusion that the witnesses have deposed in their affidavits something which is far from the truth. The SubInspector of Police who has filed his affidavit has no reason to be malicious towards the petitioner. His statement that he was absent from 4 o'clock to 6 o'clock from the station house on account of search at the premises of the petitioner-firm should be believed. In that view of the matter, with regret I must hold that the petitioner has tried to improve his case on this count by filing the affidavits of the witnesses who having signed the mahazar and the seizure order, have gone back on the same, long after the event. I, therefore, hold that there has been no violation, in the instant case, of sub-section (4) of section 100 of the Code of Criminal Procedure except to the extent indicated. 18.. I have already dealt with the question of indiscriminate search referring to the decision of Jagannatha Shetty, J., in Neminath Brothers' case [1980] 45 STC 490. I may however add here that the Supreme Court in the case of Pooran Mal v. Director of Inspection (Investigation) of Income-tax, New Delhi, AIR 1974 SC 348 in a Constitution Bench had occasion to consider th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the same is left in the business premises before the witnesses and again that endorsement has been signed by Basavalingappa and Lingareddy, the attesting witnesses. There is no prescription of the form of the receipt of seized documents and the records, required to be issued under sub-section (3) of section 28 of the Act. Therefore, any form of writing which evidences the seizure of documents and the details relating to them should be construed as sufficient receipt. The seizure order in question, in detail sets out the documents and books of account and other records seized and the reasons for the seizure and the copy of the order is issued to the person who is in-charge of the premises from which the documents are seized. In such a case the seizure order must itself be held to be the receipt for the seized documents. The petitioner has produced the same which was left in its premises. The inevitable conclusion is that there was substantial compliance with the requirements of sub-section (3) of section 28 of the Act in the matter of issuing the receipt for the seized documents. 20.. Mr. Gandhi, the learned counsel for the petitioner, was permitted to raise the additional g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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