ORIENTAL RUBBER WORKS Vs. A K SINHA

JUDGEMENT

(1.) The petitioner is a partnership-firm and carries on the business in the manufacturing of and dealing in rubber goods and waterproofing. Its principal place of business is at 171A, Mahatma Gandhi Road. The petitioner is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, and also under the Central Sales Tax Act, 1956. On 4th June, 1973, the office premises of the petitioner at 171A, Mahatma Gandhi Road, was raided by respondents Nos. 1 to 4 who described themselves as Inspectors of Commercial Taxes. All the books of account, documents, registers and receipts, etc., were seized by the said respondents. Similar search was made at the factory premises of the petitioner at Kathalia, Howrah, by respondents Nos. 5 to 7 and all valuable documents, files, papers and vouchers, current cash books and registers were removed by the said respondents. It is alleged that the said search was conducted in an arbitrary manner. After the said search was conducted, the authorised Advocate of the petitioner visited the Assistant Commissioner of Commercial Taxes (Central Section) and requested him to release the books seized since it was becoming impossible on the part of the petitioner to maintain its books of account in accordance with law. The Assistant Commissioner of Commercial Taxes, however, refused to release the books. Thereafter on 11th June, 1973, a notice under Section 14(1) of the Bengal Finance (Sales Tax) Act, 1941, was served upon the petitioner by respondent No. 8, Commercial Tax Officer

(2.) (Central Section), by which the petitioner was directed to produce all books of account since the inception of the business. On 26th June, 1973, the petitioner wrote a letter to the Commercial Tax Officer (Central Section) wherein the petitioner requested to withdraw the aforesaid notice on the ground that it was unjustified and against the provisions of law to ask the petitioner to produce books of account since the inception of its business. The petitioner being aggrieved by the said search and seizure made by respondents Nos. 1 to 7 as well as the notice dated 11th June, 1973, issued by respondent No. 8 and detaining the books and documents beyond 21 days, moved this application under Article 226 of the Constitution and obtained the present rule.

(3.) Mr. Chatterjee, appearing in support of the rule, contended that under Section 14(3) of the Bengal Finance (Sales Tax) Act, 1941, the Commissioner is required to record reasons in writing of his suspicion that any dealer is attempting to evade payment of any tax under the Act. In the instant case, before the search and seizure was made, no such reasons had been recorded. Even if the power of search and seizure under Section 14(3) of the Act has been delegated to the Inspector under Rule 71, the Inspector who has to make the search and seizure has himself to form an opinion as to whether the conditions for the exercise of the powers under Section 14(3) do exist. In the instant case, Mr. Chatterjee submitted that the persons who have conducted the search are 7 in number. So the reasons to suspect could not be jointly in the minds of the said 7 Inspectors who joined together to make the search. Sub-section (3) of Section 14 reads as follows: If the Commissioner has reason to suspect that any dealer is attempting to evade payment of any tax under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers or documents of the dealer as may be necessary....