1951 (8) TMI 14 - HC - VAT and Sales Tax

Summary

Issues Involved: Conviction under Section 15(c) of the Madras General Sales Tax Act, inspection of accounts and goods under Section 14(2) of the Madras General Sales Tax Act, refusal to sign a statement, production of private papers and cash, inspection during non-business hours.

Issue-wise Detailed Analysis:

1. Conviction under Section 15(c) of the Madras General Sales Tax Act:
The petitioner was convicted by the Additional First Class Magistrate, Gannavaram at Vijayawada, and sentenced to a fine of Rs. 50 for allegedly preventing or obstructing the Assistant Commercial Tax Officer from checking his registers and goods under Section 14(2) of the Madras General Sales Tax Act. The High Court found that there was no proof that the petitioner had prevented or obstructed any inspection authorized under Section 14(2), as required by Section 15(c).

2. Inspection of Accounts and Goods under Section 14(2) of the Madras General Sales Tax Act:
The Assistant Commercial Tax Officer visited the petitioner's shop to inspect the accounts and goods. The High Court noted that the officer was only empowered to inspect the accounts and registers maintained by dealers in the ordinary course of business and the goods in their possession. The court emphasized that the officer was not authorized to compel the production of private papers and cash, thus confirming the officer's own admission that "money is not goods which can be inspected by me."

3. Refusal to Sign a Statement:
The Assistant Commercial Tax Officer prepared a statement (Ex. P. 2) and requested the petitioner to sign it. The High Court held that Rule 24 of the Madras General Sales Tax Rules did not empower the officer to prepare a statement himself incriminating the petitioner and compel him to sign it. The court found it highly objectionable for officers to prepare statements themselves and request signatures from the parties they intend to charge-sheet later. The court noted that even Magistrates authorized to record confessions must observe many formalities and cannot prepare statements themselves.

4. Production of Private Papers and Cash:
The Assistant Commercial Tax Officer requested the petitioner to produce the cash and currency notes he took out from a wooden box and put in his pocket. The High Court found that the refusal to produce these items, even if true, would not be culpable. The court emphasized that Section 14(2) did not empower the officer to compel the production of private papers and cash, thus protecting the privacy of the subject.

5. Inspection During Non-Business Hours:
The High Court noted that the inspection took place on a shop-closing day and during the lunch interval, which was not considered a "reasonable time" under Section 14(2). The court found that the Assistant Commercial Tax Officer had no right to conduct the inspection during these hours and that the petitioner's presence in the shop did not empower the officer to insist on inspection. The court also noted that the officer's eagerness to discover an omitted entry about a sale and suspected evasion of tax did not justify the inspection during non-business hours.

Conclusion:
The High Court concluded that the petitioner ought to have been acquitted of the offence, as there was no proof that he had prevented or obstructed any inspection authorized under Section 14(2). The conviction and sentence of the petitioner were set aside, and the petitioner was acquitted. The fine, if paid, was ordered to be refunded.