1974 (3) TMI 89 - HC - VAT and Sales Tax

Summary

Issues:
1. Seizure of records by the Intelligence Officer under the Kerala General Sales Tax Act, 1963.
2. Legal validity of retaining seized records for prosecution purposes.
3. Interpretation of section 28(3)(a) of the Act regarding the retention of seized records.
4. Petition for a writ of mandamus to return the seized records.

Analysis:
The petitioner, a registered dealer under the Kerala General Sales Tax Act, had his shop inspected by the Intelligence Officer, who seized a daybook and account slips. The petitioner sought the return of the seized records through a writ petition. The Deputy Commissioner, in a counter-affidavit, argued that the seizure was for launching a prosecution due to suspected tax evasion. The counter-affidavit cited section 28(3)(a) of the Act, allowing seizure if tax evasion is suspected. However, the court noted that the provision only permits retention for prosecution if there is a current or imminent prosecution, not merely a contemplated one. The court highlighted that seizure of records infringes on fundamental rights and must be strictly in accordance with statutory provisions. As no prosecution had been initiated by the date of the counter-affidavit, the court held that retention of records for anticipated prosecution was not justified under the law.

The court emphasized that the statutory provision allows retention of seized records only if required for an existing or imminent prosecution, not merely a potential one. The court rejected the argument that retention could be based on a contemplated prosecution, as it would grant excessive discretion to authorities. The judgment clarified that the authority must return seized records after 30 days unless needed for a prosecution already initiated or imminent. The court noted that a prosecution was initiated after the petition was filed, but refrained from commenting on the delay. Ultimately, the court allowed the petition, directing the first respondent to return the seized records within one month and ordered the respondent to bear the petitioner's costs.

In conclusion, the judgment underscores the importance of strict adherence to statutory provisions regarding the seizure and retention of records by authorities under the Kerala General Sales Tax Act. It clarifies that retention beyond 30 days is only permissible if necessary for an ongoing or imminent prosecution, not merely anticipated. The court's decision to grant the petition and order the return of seized records emphasizes the protection of fundamental rights and the need for legal procedures to be followed diligently in such cases.