TMI Blog2008 (7) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... ified products, namely, Liberty, Action, Hotshot, Woodland, Levis, Lakhani, etc. The petitioner No. 2 accounts officer of the petitioner-company, is the authorised signatory of the company. The petitioner-company is engaged in the business of stocking and selling, in wholesale as well as retail, of different varieties of shoes. On February 6, 2008, respondent No. 4, namely Inspector of Tax, Unit-B, Guwahati, came to inspect the petitioner-company's godown at Dhirenpara, Guwahati, and served, on the petitioner-company, a notice, dated February 6, 2008, issued under section 74(1) of the Act, and demanded that the petitioner-company shall produce or cause to be produced all necessary documents related to the books of account, on February 6, 2008 itself, in order to ascertain the taxes payable by the petitioner-company. Respondent No. 4 also seized, vide two seizure lists, stock of goods, documents, stock register, other registers and books relating to the business of the petitioner-company. At the time of the said seizure, the petitioner-company had, in their stock, both plastic as well as leather goods. While the plastic goods are taxable at the rate of four per cent of its value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to why penalty at three times of the amount of tax evaded be not imposed, the penalty leviable being to the tune of Rs. 1,99,41,570. By making the present review petition, the petitioners have sought for review of the judgment and order, dated April 11, 2008(1), to the extent that the same had upheld the seizure of the goods. The ground for seeking such a review can be, broadly speaking, divided into two parts, namely, (i) that (1)Reported as Dhanani Shoes Ltd. v. State of Assam [2008] 14 VST 422 (Gauhati). the seizure was upheld on a factually incorrect submission made on behalf of the respondents, such incorrect submissions, in the writ petition, having been made on, perhaps, incorrect instructions given to their counsel by the respondents inasmuch as the respondents sought to sustain, in the writ petition, seizure of the goods by contending that the seized goods did not tally with the invoices produced by the petitioners; whereas the seizure was, in fact, made not because of alleged non-production of invoices, but because of the alleged misclassification of goods and (ii) that even otherwise, the conclusion, reached in the decision aforementioned, to the effect that the seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to appreciate the controversy, which the review petition has raised, it is appropriate that the parameters of a High Court's power of review is settled before the merit of the grounds, on which the review is sought, are taken up for consideration. As regards the High Court's power of review, Mr. Dutta has submitted that there is a difference between the power of review and the appellate power of a court. Under the guise of review, a review petitioner, according to Mr. Dutta, cannot seek review of the entire case on merit, for, the merit of an order or of a case can be decided in appeal and not by way of review petition. It is also submitted by Mr. Dutta that a review can be for an error on the face of the record, such error being an error of fact, and not for correction of an error of law inasmuch as an error of law, contends Mr. Dutta, can be corrected by a court of appeal and not by resorting to the power of review. A review, further contends Mr. Dutta, is possible under order 47, rule 1 of the Code of Civil Procedure, 1908 (in short, the Code ) on three specific grounds, namely, (i) discovery of new and important matter or evidence, which, after exercise of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that an error apparent on the face of the record would mean such an order, which would strike one on a mere looking at the record and would not require any long-drawn process of reasoning, where there may be conceivably two opinions. While agreeing, broadly, with the above submissions, made on behalf of the respondents, as regards the scope of review jurisdiction of the High Court, Dr. Saraf points out that the three grounds, which, in the light of the provisions of order 47, rule 1 of the Code, were mentioned, in Moran Mar Basselios Cathlicos v. Most Rev. Mar Poulose Athanasius AIR 1954 SC 526, as the only grounds on which alone review was possible, is not a rule of universal application, for, it is, according to Dr. Saraf, permissible to review an order, which is found to have been suffering from mistake of fact or law and, if necessitated, an order can be reviewed by even invoking the doctrine of actus curiae neminen gravabit . Hence, in a given case, the court may review its order, contends Dr. Saraf, on any other sufficient reason , though such a reason may not necessarily be analogous to the two grounds specified in order 47, rule 1, namely, (i) discovery of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, points out Dr. Saraf, would stand defeated if a court refuses to review its order even when the court is convinced that its interpretation of law, on a point, was palpably incorrect and that the decision rendered, on the basis of such incorrect interpretation of law, is causing miscarriage of justice. In support of his submission that even an error of law or misinterpretation of law can become, in an appropriate case, a ground for review, Dr. Saraf relies, once again, on Board of Control for Cricket, India [2005] 4 SCC 741. Let me, now, deal with the correctness or otherwise of the submissions noted above and determine the scope and ambit of the power of review of the High Courts. While considering the scope of the power of review, what needs to be noted is that under section 114 of the Code, any person, considering himself aggrieved, by a decree or order of a court from which appeal is allowed, but no appeal is preferred, or where there is no provision for appeal against the order or decree, may apply for review of the decree or order, as the case may be, in the court, which made the order or passed the decree. Broadly speaking, thus, under section 114 of the Code, review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, namely, (i) discovery of new and important matter or evidence, which, after the exercise of due diligence, was not within the applicant's knowledge or could not be produced by him at the time, when the decree or order was passed and (ii) mistake or error apparent on the face of the record. In short, thus, what Moran Mar Basselios Cathlicos AIR 1954 SC 526 laid down was that the expression, any other sufficient reason , cannot be construed as any sufficient reason and that any sufficient reason cannot become a ground for review unless even such sufficient reason is analogous to one of the other two grounds mentioned in order 47, rule 1, namely, (i) discovery of new and important matter or evidence, which, after the exercise of due diligence, was not within the applicant's knowledge or could not be produced by him at the time, when the decree was passed or (ii) mistake or error apparent on the face of the record. Board of Control for Cricket, India [2005] 4 SCC 741 is one of those cases, which has elaborately dealt with the scope of the power of review, particularly, of the High Courts and, having considered the case of Moran Mar Basselios Cathlicos AIR 1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1954 SC 526, can ever become a ground for review of an order or decision by a High Court. In fact, there is plethora of judicial pronouncements of the Supreme Court, which show that there can be exceptional cases, where a deviation from the grounds of review, as propounded in Moran Mar Basselios Cathlicos AIR 1954 SC 526, is possible and one of such cases is the case of Lily Thomas [2000] 6 SCC 224, wherein, having taken into account the facts that (a) the power of review is a creation of statute and not an inherent power, that (b) no power of review can be exercised if not given to a court or Tribunal either specifically or by necessary implication; and that (c) under the guise of review jurisdiction, merit of a decision cannot really be examined, the Supreme Court has, in unequivocal terms, pointed out that justice is, after all, a virtue, which must prevail over all barriers and that the rules, procedures or technicalities of law must, if necessary, bend before justice and that such a situation may arise, when a court finds that it has rendered a decision, which it would not have rendered, but for an assumption of fact, which, in fact, did not exist and its adherence to suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or technicalities of law cannot stand in the way of administration of justice. Law has to bend before justice. If the court finds that the error pointed out in the review petition was under a mistake and the earlier judgment would not have been passed but for erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice nothing would preclude the court from rectifying the error . . . (emphasis(1) supplied) While pointing out, in Board of Control for Cricket, India [2005] 4 SCC 741, that in exercising the power of review, the court can take into account any subsequent event, the Supreme Court has pointed out that when a court, in the light of the subsequent event, finds that it had committed a mistake in understanding the nature and purport of an undertaking given by a counsel appearing on behalf of a party, the court may rectify its own mistake. One can profitably refer, in this regard, to the following observations made, at paras 87, 89, 90 and 93, in Board of Control for Cricket, India [2005] 4 SCC 741. 87. Indisputably, an undertaking had been given by a learned Senior Counsel appearing on behalf of the Board. In the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a question of fact and would, therefore, depend on the facts and circumstances of a given case. What the Supreme Court has pointed out, very clearly, in Board of Control for Cricket, India [2005] 4 SCC 741, is that the words sufficient reason , which appear in order 47, rule 1, are wide enough to include misconception of fact or law by a court and that even when a mistake of fact or law has crept into a judicial decision due to court's misunderstanding of the nature of an undertaking given by an advocate, an application for review may be necessary and by invoking the doctrine of actus curiae neminem gravabit , the court can correct such an error. This, in turn, shows that if, as a result of misunderstanding of fact or law by a court, a mistake has crept in, which the court finds would cause or has caused miscarriage of justice, such an error can, and must, be corrected by exercising the power of review and, for this purpose, the doctrine of actus curiae neminem gravabit can also be invoked. A mistake, on the part of the court, would include, according to the decision in Board of Control for Cricket, India [2005] 4 SCC 741, a mistake in the nature of the undertaking, which m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus curiae neminem gravabit can be in exceptional cases and that every error cannot be rectified on the basis of the principle that an act of the court shall prejudice none. In fact from the decision in Municipal Board, Pratabgarh [1982] 3 SCC 331, what clearly emerges is that when a High Court acknowledges its error and rectifies its error, which has crept in, what the High Court really does is restore the rule of law and not defeat it. Points out the apex court, in Municipal Board, Pratabgarh [1982] 3 SCC 331, that laws cannot be interpreted and enforced divorced from their effect on human beings for whom the laws are meant. Further observed the Supreme Court, in Municipal Board, Pratabgarh [1982] 3 SCC 331, on this aspect of law, thus, . . Undoubtedly, rule of law must prevail but as is often said, 'rule of law must run akin to rule of life. And life of law is not logic but experience'. By pointing out the error which according to us crept into the High Court's judgment the legal position is restored and the rule of law has been ensured its pristine glory . . . . From the decisions in Municipal Board, Pratabgarh [1982] 3 SCC 331, Rajesh D. Darbar [2003] 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the work of offering Indian children in adoption to foreign parents. As the apex court found that there was no legislation laying down the principles and norms, which must be adhered to, in giving an Indian child in adoption to foreign parents, the apex court passed certain directions. However, subsequent to the issuance of the directions by the apex court on this subject, some social and child welfare agencies, engaged in the placement of children in inter-country adoption, felt that there were certain difficulties in implementing the principles and norms laid down by the apex court and accordingly, applications were made by some of such agencies seeking clarification as well as alteration in the principle and norms, which had been laid down by the apex court in this regard. The apex court, in Laxmi Kant Pandey [2001] 9 SCC 379, clarified the norms and procedures, which it had laid down earlier on the subject-matter of inter-country adoption. From the decision in Laxmi Kant Pandey [2001] 9 SCC 379 too, one can easily gather that in a given case, when a court's decision or direction has been misunderstood by the parties or have created difficulties in carrying out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its order or decision if the statute does not confer on the court or the Tribunal, as the case may be, the power to review its own order. This apart, whatever limitations are imposed by a statute, while conferring the power of review on a court or a Tribunal, the court or the Tribunal, as the case may be, must adhere to the limitations, which the relevant statute may impose on the exercise of such power. Section 114 CPC, which embodies the substantive power of review of a civil court does not impose any limitations on the court's power to review its order or decision, yet the power of review even by a civil court cannot be unguided and uncanalised, for, order 47, rule 1 circumscribes the court's power of review. Though, at one point of time, it was considered to be a rule of universal application that review by a court of its order is not possible except on two prescribed grounds, namely, (i) discovery of new and important matter or evidence, which, after the exercise of due diligence, was not within the applicant's knowledge or could not be produced by him at the time, when the decree or order was passed and (ii) mistake or error apparent on the face of the record o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a court, a mistake has crept in a decision and the court finds that the error is apparent on the face of the record and/or that the error has caused miscarriage of justice or would cause, unless corrected, miscarriage of justice, such an error can, and must, be corrected by exercising the power of review and, for this purpose, the doctrine of actus curiae neminem gravabit can also be invoked. A mistake, on the part of the court, would include, according to the decision in Board of Control for Cricket, India [2005] 4 SCC 741, a mistake in the nature of the undertaking, which may have been given by a counsel meaning thereby that when a counsel, on a mistaken belief or on an erroneous or incorrect instruction, makes a statement and the court acts on such a statement, but, on a review application having been subsequently filed, the court finds that it had misunderstood the counsel's submission or had got misled by a counsel's submission or when the court finds that it (court) had proceeded on an assumption of fact, which did not really exist, or when it (court) finds that it had misinterpreted a provision of law or had acted on a misconception of law and that the error, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of seizure. Stock of goods was found not matching with the invoices produced. Goods taxable at the higher rate are found shown as taxable at the lower rate of taxes and thereby causing evasion of taxes payable under the AVAT Act of 2003. List of goods seized. Stock of goods found in the stock register which are shown as four per cent taxable. Instead of, now, considering a new as to what the rival submissions of the parties on the question of seizure of the goods, in the said writ petition, were, it would be more appropriate to reproduce the relevant parts of the decision (rendered on April 11, 2008, in W.P. (C). No. 1050 of 2008(1)), which deal with the rival submissions made on behalf of the parties concerned, how this court had dealt with the questions raised and why this court had, eventually, reached the conclusion that the seizure of the goods, in question, was not in violation of the relevant provisions of law. With these objectives in view, let me, first, point out as to what the rival submissions, on the question of the seizure of goods, were. The relevant submissions, on this aspect of the writ petitioner's case, as appear at para 8 of the decision, under re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Mr. Saikia, the goods, in question, cannot be said to have been accounted for. In a case of the present nature, exercise of power under section 74(5) was, according to Mr. Saikia, justified and may not, therefore, be interfered with. Reacting to the submissions made on behalf of the respondents that the seizure had been made, because of the fact that the stock of goods did not tally with the invoices produced, Mr. Goswami's submission, as noted in para 12, reads as under: 12. Repelling the above submissions made on behalf of the respondents, Mr. Goswami has contended that if the petitionercompany has sold any goods and has not paid requisite tax, the remedy lies not in making seizure under section 74 of the Act; rather, the remedy, in such a case, according to Mr. Goswami, lies in taking resort to section 40 of the Act, which makes provisions for realisation of escaped assessment. As far as the goods, in the present case, are concerned, Mr. Goswami submits that there is nothing, in the seizure list, to show that the goods had not been accounted for; rather, seizure has taken place, according to Mr. Goswami, on account of the fact that the goods were misclassified. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents dealt with the submissions so made by the petitioners, in the writ petition, is quite interesting to note and is of great importance. From the submissions as noted at para 11 of the decision, under review, it becomes clear that the respondents sought to sustain the seizure of the goods on the ground that stock of goods did not tally with the invoices produced and since the goods were found to have not been tallying with the invoices, the goods, in question, could not have been regarded as having been accounted for and that in such circumstances, exercise of power under section 74(5)(a)(ii) was justified. Notwithstanding the fact the grounds of seizure reflected that seizure was also due to the alleged misclassification of goods, this was not a ground, which was ever pressed into service by the respondents in the writ petition; rather, they abandoned or, at least, avoided seeking to assert that the seizure of the goods was on account of misclassification of goods; significantly, if I may reiterate, what the respondents sought to contend, for the purpose of sustaining the seizure of the goods, was that seizure had taken place due to the fact that the goods did not tally wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of seizure clearly mention, inter alia, that the stock of goods did not match with the invoices produced and that this sole ground of seizure is sufficient to sustain the seizure. It was not even faintly indicated or alleged, at any point of time, during the course of hearing of the writ petition, on behalf of the respondents, either orally or in their written statement, that the seizure of the goods was sustainable, or must be sustained, on the ground that there was misclassification of goods in the sense that the goods, which are taxable at higher rate, were shown taxable at a lower rate. In the light of the rival submissions, made before this court, as the same appear in the court's earlier decision(1), under review, at paras 8, 11 and 12, regarding how this court and why this court had come to take the view that the seizure of goods cannot be interfered with, this court's observations, made at paras 15, 16, 39, 40 and 41, are relevant and, therefore, reproduced hereinbelow: 15. A conjoint reading of section 40 and section 74, particularly, sub-section (3) thereof, makes it clear that seizure of the accounts, registers, etc., is permissible if the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of taxes and thereby causing evasion of taxes payable under the AVAT Act, 2003.' 40.. From a bare reading of the grounds of seizure of goods, as mentioned above, it becomes transparent that the stocks of goods were allegedly found to be not matching with the invoices produced. The allegations, so made against the petitioner-company, may or may not be true, but this court, in the present proceeding, has to proceed on the assumption that the allegations are true and, upon such assumption, examine and test if the grounds, assigned for the seizure of the stock, are sustainable in law. Viewed in this light, it becomes clear that when the goods, lying in the godown of the petitioner-company, were allegedly found not tallying with the invoices produced by the petitioners' representative, it cannot be said that the goods had been accounted for by the petitioner-company in their books of account, registers, etc. In such circumstances, if I may reiterate, the goods, in question, cannot be said to have been accounted for in terms of section 74(5)(a)(ii). 41.. Thus, the conditions precedent for exercise of power under section 74(5)(a)(ii) did exist in the present case and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they have been carrying on a process of verification for the purpose of determining as to what, if any, income of the petitioner-company has escaped assessment due to either incorrect accounting of the goods or due to incorrect maintenance of the account books. In either case, therefore, verification process or the enquiry, which was initiated, needs to be brought to an expeditious end, for, this process of verification or enquiry cannot be kept indefinitely pending. Ends of justice, therefore, demand that appropriate directions be issued to the respondents to deal with the matter in such a manner as would uphold the legislative intent embodied in section 74(5). 46.. With the above object in view, the respondents are hereby directed to complete, if they have not already completed, the process of verification or enquiry, within a period of one week from today, and, upon completion of such verification or enquiry, respondents shall permit the petitioner to obtain release of the seized goods in terms of the provisions contained in section 74(5) and other provisions relevant thereto or connected therewith. Following the directions, given in the decision, dated April 11, 2008(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be taken against you. Your reply to the notice should reach undersigned within May 15, 2008. In issuing this notice judgment and order dated April 11, 2008 of the honourable Gauhati High Court in Writ Petition (Civil) No. 1050 of 2008 Dhanani Shoes Ltd. v. State of Assam(1) was taken into consideration. Sd/- Inspector of Taxes, Unit-B, Guwahati. Having been served with the impugned notice dated April 16, 2008, aforementioned, the present review petitioners, as already pointed out above, have sought for review of the conclusion reached by this court, particularly, in para 41 of the decision, to the effect that the exercise of power of seizure of the goods, under section 74(5)(a)(ii), by respondent No. 2, cannot be said to be illegal or without foundation. What is being pointed out, in order to seek review of the conclusion so reached, is that this conclusion has been reached on a specific submission, which had been made, orally as well as in writing, on behalf of the respondents, by Mr. Saikia, learned counsel, appearing on behalf of the respondents, during the course of hearing of the writ petition, that the seizure, in question, had been made, because o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the seized goods had not been made in the books of account, registers or documents maintained by the petitioners and/or that the seized goods had not tallied with the invoices produced. This subsequent event, according to the review petitioners, proves correctness of the case, which the writ petitioners had, originally, set up, in their writ petition, by contending that the seizure of the goods was illegal, because the same had been made due to misclassification of goods and not due to the omission to make any entry in any books of account, register or documents. Thus, it is, now, contended, on behalf of the review petitioners, that this court's conclusion (reached at para 41 of its decision, which is under review), that the seizure of the goods was legal, has been proved to be factually incorrect in the light of the subsequent development, i.e., the impugned notice, dated April 16, 2008, and this incorrect conclusion is apparent on the face of the record, such incorrect conclusion having been reached due to an incorrect submission made by Mr. Saikia, learned counsel, appearing on behalf of the respondents, and such incorrect submissions had, perhaps, been made due to fals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case, that it (this court), in the interest of justice, clarifies that the seizure, in question, had been upheld, in its earlier decision, in W.P. (C) No. 1050 of 2008, on the sole ground that seizure was shown to have been made, because the stock of goods were found to have not been matching with the invoices produced. This court also owes a duty to the parties concerned to clarify that the seizure of the goods had definitely not been sought to be sustained by the respondents, during the course of hearing of the said writ petition, on the ground that the goods, which are taxable at a higher rate, had been shown taxable at a lower rate and, furthermore, this court, ought to have clarified and must, now, clarify, and, indeed, clarifies that this court had never upheld the seizure, in question, on the ground of alleged misclassification of the goods by the petitioners in the sense that the goods, which are taxable at a higher rate, had been allegedly shown taxable, at a lower rate, by the writ petitioners. Having realised that the basis of the conclusion reached, in the writ petition, as regards the validity of the seizure of the goods, has disappeared, it is, now, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any place of business or vehicle or any other building or place; but are not accounted for by the dealer in his accounts or registers or other documents maintained in the ordinary course of his business: Provided that a list of all the goods seized under this sub-section shall be prepared by such officer and be signed by the officer and not less than two witnesses. (b) The authority referred to in clause (a) shall, as soon as possible, after seizure of the goods under clause (a), serve upon the dealer, a notice to show-cause within a period of thirty days of service of such notice as to why a penalty equal to three times of the amount of tax as may be calculated on the price which such goods would have fetched on their assumed sale in the State, on the date of seizure, be not imposed on him for the dealer's default in not making entries in respect of such goods in his books of account or registers or other documents, as the case may be, maintained by him in the course of his business. (c) The authority seizing the goods shall record the statement, if any, given by the owner of the goods or his representative. If the authority referred to in clause (a), after taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seizing authority. What a combined, but cautious reading of clauses (a), (b) and (c) of subsection (5) of section 74 shows is that a notice, as envisaged in clause (b), would require a dealer to show-cause as to why penalty shall not be imposed for his default in not making entries, in respect of the goods seized, in his books of account or registers or other documents maintained by him in the ordinary course of his business. Clause (c) shows that if the dealer fails to give any justification for his default in not making entries, he would be penalised. The provisions, so contained in clauses (b) and (c), when read together, clearly convey that penalty is imposable only when no entry has been made in respect of the seized goods in the books of account, register or other documents maintained by the dealer in the ordinary course of his business, and his failure to offer any proper justification for not making the entries. It is, thus, seen that it is not making of any entry whatsoever, as envisaged in clauses (b) and (c), which would warrant imposition of penalty. This, in turn, shows that when clause (a) uses expression not accounted for , it would mean complete absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments can be produced. In short, one of the documents from the first set and one of the documents from the second set have to be produced and that would be a sufficient compliance with the requirements of sub-section (2) . . . What logically follows from the above discussion is that if the entries are found to have been made (in respect of the seized goods) by the dealer in his books of account, registers or other documents (as the case may be), maintained by him in the ordinary course of business, the seizing authority shall release the goods by making appropriate order. It is, thus, complete omission to make entry, which can become the ground for seizure of the goods. In other words, only those goods can be seized in respect whereof, no entry has been made. Thus, it is non-existence of entry in the books of account, registers or other documents, which can become the ground for seizure of the goods and it is this absence of entries, which is covered by the expression not accounted for . The non-existence of entry cannot be equated to the expression non-existence of proper or due or valid entries nor can the expression not accounted for be equated to the expression abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion the entries relating to the said goods were not made in the books of account, registers or other documents of the dealer would obviously mean complete absence of entries and not the deficiency or absence of proper or due or valid entries. It would be in violation of the rules of interpretation of a statute to forcibly import into, or forcibly read into, any provision of a statute, a word or an expression, which the Legislature has chosen not to import into or add, for, reading into anything, besides what clauses (a), (b) and (c) reflect, would mean re-legislation, which is impermissible in law. On a patient and cautious reading of the provisions contained in section 74(5)(a), there remains no room for doubt that the condition precedent for making seizure of the goods, under section 74(5)(a), is that entries had not been made in respect of the goods in the books of account, registers or other documents maintained in the ordinary course of the business by the dealer. If the entries have been made and with the help of the entries so made, the goods, in controversy, can be identified, it can, by no stretch of imagination, be construed that the entries have not been made in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons to believe that any dealer has evaded or is attempting to evade the payment of any tax due from him and is keeping or has kept his accounts in such a manner as is likely to cause evasion of tax payable under this Act, such authority may, for reasons to be recorded in writing, seize such accounts, registers, documents including electronic records or computer of the dealer, as may be necessary, and shall grant a receipt for the same and obtain acknowledgement of the receipt so given to him: Provided that if the dealer or person from whose custody the books of account, registers, documents including electronic records or the computer are seized refuses to give an acknowledgement, such authority may leave the receipt at the premises and record this fact. A plain reading of clause (a) of sub-section (3) of section 74 makes it clear that when the authority concerned has reason to believe that the dealer has evaded or is attempting to evade payment of tax due from him or is keeping or has kept the accounts in such a manner as is likely to cause evasion of tax payable under the Act, the books of account of the dealer may be seized. However, no such condition has been imposed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 74(5)(a) of the present Act does not now require that the goods, in question, must have been properly accounted for , rather, section 74(5)(a) makes seizure possible only when the goods have not been accounted for in the sense that no entries in the books of account, register or other documents, maintained during the ordinary course of business, has been made. Similarly, seizure of goods, under the Act of 1993, was possible even if the authority concerned had reason to suspect that evasion of tax may take place in respect of the goods, sought to be seized. No such suspicion, as regards the possibility of evasion of tax can, now, under the present Act, be made the foundation for seizure of goods. When the corresponding provisions, as embodied in the Act of 1993, are borne in mind, it becomes abundantly clear that a misclassification of goods could have, undoubtedly, been made a ground for seizure under the old Act of 1993, but not under the present Act, for, the word properly , which appeared in section 46(2)(b), stands, now, consciously omitted in the present Act. It is interesting to note that even when there were some semblance of authority, under the old Act of 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dealer if the total quantity of goods in stock or in transit are identifiable and the variety thereof is also known, to hold that the goods are not properly accounted for merely because there is a difference of opinion as to the sale price thereof, in the considered view of the court, would be doing violence to the scheme contemplated by the Act. Not only that, it would be inherently dangerous to read any such conferment of power at the stage of seizure in view of the possibility of abuse and misuse and it would be far more reasonable to understand such a conferment of power to have been made by the Legislature at the stage of completion of the quasi-judicial act of assessment. When effective remedy can be attempted at the stage of final assessment and the object of the Act, i.e., to ensure due and proper collection of tax can be achieved at the stage of assessment, there is no reason why by a process of judicial interpretation such a power should be conferred to the authority at the stage of seizure. The power to determine the sale price for the purpose of assessment of tax under the Act, in case of a dispute, therefore, must be understood to have been vested in the assessing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the stock register which are shown as four per cent taxable. Sd./Illegible 6/2/2008 Signature of the person from whom seized. Sd./Illegible. 6/2/2008 Signature of seizing officer Inspector of Taxes, Unit B, Guwahati. Witness: 1. Sd./Illegible 2. Sd./Illegible 6/2/2008. When the list of goods seized, appearing in the seizure list, dated February 6, 2008 is read, it becomes clear that goods, which came to be seized, were, indeed, entered in the stock register as goods taxable at four per cent. It clearly implies that the stock of goods stood entered in the stock register and, therefore, in the face of such entries having been, admittedly, made, in the stock register, it cannot be said that the goods had not been accounted for and, hence, the seizing authority must be held to have acted arbitrarily and illegally in seizing the said goods from the godown of the petitioners. It appears that the seizure was made only on the ground that the goods, which, according to the petitioner, were plastic shoes taxable at the rate of 4 paise in a rupee, were, in the opinion of the seizing authority, not plastic goods and, therefore, taxable at the rate of 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, the error needs to be corrected or else, there would be serious miscarriage of justice, for, saleable goods of the petitioners stand seized adversely affecting their business. Situated thus, this court has no escape but to acknowledge its error in reaching the conclusion, which it had reached, as regards the validity of the seizure, and when this error becomes too transparent and too glaring to be refused to be taken notice of, it becomes the duty of this court to correct the error, which had crept in its decision, under review. When the seizure, in question, has, now, been held to be without jurisdiction, it logically follows that the impugned notice to show cause, dated April 16, 2008 (which is dependent upon the verification carried out on the strength of the seizure of the goods), too suffers from lack of jurisdiction and cannot be sustained. Thus, this court's finding with regard to its own decision, under review, is sufficient not only to set aside the seizure, in question, but also the impugned notice to show cause. W.P. (C). No. 1781 of 2008: Bearing in mind what has already been indicated above, let me, now, deal with W.P. (C). No. 1781 of 2008, whereb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in purported exercise of the powers under section 74(5)(a)(ii). There is also no dispute that the notice, in question, has been issued in exercise of powers under section 74(5)(b). A notice, under clause (b) of section 74(5), can be issued only when there is legally sustainable seizure under section 74(5)(a)(ii). When the seizure itself has been held to be without jurisdiction, the notice, in question, which stands issued under clause (b) of section 74(5), cannot survive on its own or independent of the said seizure. Suspicion of evasion of tax is one of the conditions for seizure of the books of account, registers or documents, but it cannot become a ground for seizure of the goods unless no entry, in respect of the goods, sought to be seized, is found to have been made in the books of account, registers or documents maintained by a dealer in the ordinary course of his business. The seizing authority can assume jurisdiction, under section 74(5)(b), to issue show-cause notice only when the dealer defaults in making entry in respect of the goods in his books of account, registers or other documents as aforementioned. The very fact that the impugned show-cause notice claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well-settled, will issue appropriate orders or directions to prevent such consequences. It needs to be pointed out that in Calcutta Discount Co. Ltd. v. Incometax Officer, Companies District I, Calcutta [1961] 41 ITR 191 (SC); AIR 1961 SC 372, it was contended, on behalf of the State, that since provisions exist in the statute enabling the person, proceeded against, to show cause against the assessment, which is sought to be made, and when provisions also exist for preferring appeal against the order, which may be passed in the assessment proceeding, there was an alternative remedy available to the person proceeded against and, hence, writ jurisdiction, under article 226, was not invokable. Reacting to the submissions so made, the Constitution Bench pointed out that when the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the fundamental rights contained in Part III of the Constitution but also for 'any other purpose'. Under article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged . . . From what have been observed and laid down, in Whirlpool Corporation Ltd. [1998] 8 SCC 1, it becomes clear that an alternative remedy is not an absolute bar to the exercise of jurisdiction, under article 226, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mptions of law, which are extraneous and untenable make the notice without jurisdiction and deserves to be interfered with. From the decisions referred to above, it becomes clear that it is no longer res integra that when show-cause notice is found to be without jurisdiction and/or found to be issued in excess of jurisdiction or when the notice is found to have been issued without fulfilment of the pre-conditions laid down by the Legislature for issuance of such notice, High Court, in exercise of its extraordinary power, under the article 226, can interfere with such a notice. In Union of India v. Hindalco Industries reported in [2004] 135 STC 281 (SC); [2003] 5 SCC 194, where the High Court had interfered with the show-cause notice, the Supreme Court held that if an authority, which has the jurisdiction in regard to one aspect, launches an enquiry into a matter in respect of which it had no jurisdiction, then, merely because it had, in regard to one aspect, jurisdiction, the court cannot ignore the fact of lack of jurisdiction and allow the Tribunal to proceed in the matter in respect of which it had no jurisdiction to make enquiry. The observations made, in this regard, by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the entertainment of a writ petition, when the action proposed by an authority is without jurisdiction, as already indicated above, is no longer res integra. VST Industries Ltd. [2008] 16 VST 283 (Gauhati) [App]; [2004] 2 GLT 290 is, in fact, a case, where a notice to show cause was challenged by filing a miscellaneous application without amending the writ petition. This apart, the show-cause notice, issued in V.S.T. Industries Ltd. [2004] 2 GLT 290, aimed at finding out the facts with participation of the assessee; whereas the notice to show cause, in the present case, is, as already held above, without jurisdiction and when the notice to show cause suffers from complete lack of jurisdiction, the fact that an opportunity to show cause has been provided against the proposed penalty is of no real significance. To the facts of the case at hand, therefore, the decision in V.S.T. Industries Ltd. [2008] 16 VST 283 (Gauhati) [App]; [2004] 2 GLT 290 has no application at all. Turning to the case of M.S. Associates [2007] 4 GLT 176, it needs to be pointed out that in M.S. Associates [2007] 4 GLT 176, a notice to show cause was issued on the ground that the petitioner therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction by an authority, without the conditions therefor being satisfied, would obviously be a case of the authority acting without jurisdiction. If, however, an authority, while acting within its jurisdiction, makes an error of law, then, it may become a case of exceeding its jurisdiction. While the latter case is a case of excess of jurisdiction and may be corrected by supervisory jurisdiction, the former suffers from complete lack of jurisdiction and can be interfered with, at its very inception, by the superior court, for, the assumption of jurisdiction, without existence of the conditions precedent thereof, would make the decision, to be rendered, otherwise, also, a nullity. If the Legislature enacts a law by stating that a power can be exercised by an authority subject to existence of certain state of affairs, it would logically follow, in such a case, that if the state of affairs, as conceived in the legislation, does not exist, the authority would have no jurisdiction. A writ court cannot allow an authority to proceed with a matter even when an authority has no jurisdiction to proceed with the matter. An authority can exercise jurisdiction only when it has jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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