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TMI Blog1971 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ary. The officer seizing the account, register or document shall forthwith grant a receipt for the same, and shall be bound to return them to the dealer or the person from whose custody they were seized, within a period of ninety days from the date of such seizure, after having such copies or extracts taken therefrom as may be considered necessary, provided the dealer or the aforesaid person gives a receipt in writing for the account, register or document returned to him. The officer may, before returning the account, register or document, affix his signature and his official seal at one or more places thereon, and in such case the dealer or the aforesaid person will be required to mention in the receipt given by him the number of places where the signature and seal of such officer has been affixed on each account, register or document." 3.. The first argument is put in this way: The account, register or documents are the exclusive property of the dealer and this enactment places unreasonable restrictions on his right to hold this property. 4.. The need for examination of the nature of the dealer's proprietary right in the account, register or documents mentioned in section 13(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to maintain stock-books in respect of raw materials as well as products at the various points of production. Rule 73 provides that all accounts including cash memos. and vouchers relating to production, stocks, purchases, deliveries and sales shall be preserved for a period of four years after the close of the year to which they relate. Rule 74 provides that a licensed dealer, who also deals in goods not covered by his licence, shall keep separate accounts for the goods covered by the licence and goods not so covered. 8.. Broadly speaking, the foregoing provisions impose a statutory duty on the dealer to maintain true and correct account of his transactions of sale and purchase. Certain other provisions create a corresponding right in certain authorities to inspect those accounts and to take notes therefrom. Section 13(1) provides that any officer not below the rank of an assessing authority and empowered by the State Government in this behalf may require a dealer to produce before him any book, document or account relating to his business and may inspect, examine and copy the same. Section 13(2) provides that all books, documents and accounts maintained by any dealer in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wilson(1) the privilege against self-incrimination was not upheld in relation to the books of a corporation. Mr. Justice Hughes said: "The question still remains with respect to the nature of the documents and the capacity in which they are held. It may yet appear that they are of a character which subjects them to the scrutiny demanded and that the custodian has voluntarily assumed a duty which overrides the claim of privilege..... Thus, in the case of public records and official documents, made or kept in the administration of public office, the fact of actual possession or lawful custody would not justify the officer in resisting inspection, even though the record was made by himself and would supply the evidence of his criminal dereliction. If he has embezzled the public moneys and falsified the public accounts, he cannot seal his official records and withhold them from the prosecuting authorities on a plea of constitutional privilege against self-incrimination. The principle applies not only to public documents in public offices, but also to records required by law to be kept in order that there may be suitable information of transactions which are the appropriate subjects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vague and indefinite, and (6) that neither the provisions of the Code of Criminal Procedure regulating the power of search and seizure have been applied nor like safeguards have been given to the dealer. 16.. The last point may easily be disposed of. Article 19(5) does not force the "reasonable" into a procrustean bed. It is a part of an instrument which is designed to keep the wheels of Government in motion, of necessity, it is not flexless. "The test of reasonableness..... should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases": State of Madras v. V.G. Row[1952] S.C.R. 597 at p. 607. In each case it is necessary to weigh the "nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, and the disproportion of the imposition": (Ibid at page 607); R.C. Cooper v. Union of IndiaA.I.R. 1970 S.C. 564 at p. 593; 40 Comp. Cas. 325 (S.C.). 17.. The officer authorised to seize documents is the officer authorised by the State Government to inspect goods and accounts under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds for believing both these things should co-exist prior to the making of search and seizure. Reasonable grounds should exist objectively and can be tested in a court. Where the court finds that they did not exist, the search and seizure will be illegal: Emperor v. Vimlabai Deshpande(1), Barium Chemicals Ltd. v. Company Law BoardA.I.R. 1967 S.C. 295; 36 Comp. Cas. 39 (S.C.)., Rohtas Industries Ltd. v. S.D. Agarwal[1969] 3 S.C.R. 108; 39 Comp. Cas. 781 (S.C.). That the law does not oblige the authorised officer to record the reasonable grounds for his belief is accordingly a weakness of meagre weight. 20.. The expression "trying to evade his liability for tax" is not vague and uncertain. A crime has got four stages: (1) intention, (2) preparation, (3) attempt and (4) act. The expression "trying to evade" will exclude the first stage. It will include the third stage. In the context with which we are concerned it may also comprehend the second stage. Preparation may sometimes shade off into attempt. Where a dealer maintains two accounts, one true and the other false or suppresses the true accounts, he is in the popular sense trying to evade his liability for tax. 21.. As the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no disproportionate abridgment of the dealer's right of property. 27.. In M.P. Sharma v. Satish Chandra[1954] S.C.R. 1077., it was held that article 19(1)(f) does not imply a guarantee of protection from search without warrant. In Senairam Doongarmal v. K.E. Johnson[1964] 52 I.T.R. 637; A.I.R. 1964 Assam 1., it was held by majority that the provisions for search and seizure of documents in the Income-tax Act violated article 19(1)(f) and (g) of the Constitution. But a contrary view was taken in Surajmull Nagarmull v. Commissioner of Income-taxA.I.R. 1961 Cal. 578. It is not necessary to express any opinion on the provisions of the Income-tax Act, which are vitally different in substance and background from section 13(3). In Wazir Chand v. The State of Himachal Pradesh[1955] 1 S.C.R. 408., search and seizure of goods was made without authority of law. In M/s. Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh[1954] S.C.R. 803., the impugned enactment, unlike the one before us, confided unrestricted power to grant, refuse and cancel a licence to carry on trade in coal and was struck down as an unreasonable restriction. In Hamdard Dawakhana v. The Union of India[1960] 2 S.C.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power under section 13(2) and (4) the authorised officer finds accounts which may be inspected conveniently on the spot, he will inspect them at once on the spot. But where the accounts found are voluminous and cannot be instantaneously inspected it is reasonable to allow him to seize them and to retain them for inspection at his reasonable convenience. The power of retaining the documents may be exercised only in such an exigency. So the criterion for the exercise of power is the immensity of inspection. This criterion is reasonably embedded in section 13(3). Accordingly section 13(3) does not conflict with article 14. 32.. Counsel has relied on Suraj Mall Mohta and Co. v. A.V. Visvanatha Sastr[1954] 26 I.T.R. 1 (S.C.); [1955] 1 S.C.R. 448., Shree Meenakshi Mills Ltd. v. A.V. Visvanatha Sastri[1954] 26 I.T.R. 713 (S.C.); [1955] 1 S.C.R. 787., Anandji Haridas and Co. v. S.P. Kushare[1968] 21 S.T.C. 326 (S.C.); [1968] 1 S.C.R. 661. and Harakchand Ratanchand v. Union of IndiaA.I.R. 1970 S.C. 1453., but they are all distinguishable from the provisions of law before us. 33.. Our answers to the two questions referred to us are: Section 13(3) of the Sales Tax Act does not contravene ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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