AMAR ENTERPRISES Vs. COMMISSIONER OF TAXES

JUDGEMENT

(1.) THIS writ application is directed and arises out of seizure of the books of accounts by the Inspector of Taxes, Bureau of Investigation. The materials facts - A team of officers consisting of Superintendent of Taxes and the Inspector of Taxes attached to the Bureau of Investigation along with the Superintendent of Police and Inspector of Police of Bureau of Investigation (Economic Offences) and others visited business premises of the petitioner on January 12, 1995. After conclusion of search the respondent No. 4, the Inspector of Taxes, issued the seizure list and seized the purchase voucher for issue, sales bills files, sales register and cash book for the year 1994-95 on the ground that the dealer charged taxes at instead of 8 per cent for some sales of tyres under the Assam General Sales Tax Act, 1993. After the search of the premises the respondent No. 4 in exercise of power conferred under section 44(3) of the Assam General Sales Tax Act, 1993 seized the books of account from the petitioner firm and served a copy of the seizure list to the petitioner. The petitioner thereafter was issued with a notice No. BIEO/ST/190 dated February 20, 1995 to produce the books of account in respect of the seized documents as specified in the seizure list for verification along with seized documents on February 28, 1995. By letter dated February 28, 1995 the petitioner sought for time to produce books of accounts and thereafter the petitioner was again served with a notice dated April 1, 1995 for production of books of accounts in support of the seized documents at 11 a.m. on April 24, 1995. Instead of producing the records as per application on February 28, 1995 and April 24, 1995 the petitioner moved this Court by way of writ petition assailing the legality of the seizure of books of account.

(2.) THE respondent contested the writ petition and submitted its affidavit, in its affidavit the respondent stated that the books of account were seized by the Inspector of Taxes by virtue of power delegated by the Commissioner, Taxes under section 3(3) of the Act read with rule 8 of the Rules, framed under the Act. Inspection was conducted by the Superintendent of Taxes and Inspector of Taxes on January 12, 1995 at the business premises of the dealer and in course of inspection the Inspector of Taxes issued a notice under section 44(1) of the Act to the dealer for production of the books of account and other documents for the purpose of inspection. Since it was mere inspection no search warrant was obtained for the purpose. The Inspector of Taxes found some discrepancy in the books of accounts and documents which disclosed that the dealer charged less rate of tax in respect of the sales of goods made by him and apparently such under charging of tax would lead to under-payment of tax and seized the books of accounts under section 44(3) of the Act as he had reasons to suspect of evasion of taxes under the Act. The respondents further stated that the verification of the books of account seized by the Inspector of Taxes was essential for charging as well as realisation of tax, vtz-a-viz, the volume of evasion of tax. The respondent also stated when the petitioner made available to the respondents the accounts, documents, etc., the unrecorded sales and sales in contravention of the Act and the Rules, the plea of the petitioner that the Inspector of Taxes had no reason to suspect cannot be accepted in its face value. According to the respondents under the law all accounts, registers and documents relating to the financial transaction of a dealer, the profit derived from such transactions and all goods kept in any place of business of any dealer shall at all reasonable times, be open for inspection by any authority appointed under sub-section (1) of section 3 and the dealer shall render all possible assistance to such authority in carrying out the inspection. Therefore the question of conducting any search of business premises of the petitioner can not be faulted. The respondent also stated in its affidavit that the Superintendent of Taxes and the Inspector of Taxes are the taxing authorities within the meaning of rule 7 of the Rules framed under the Act and they were appointed to assist the Commissioner under section 3(1) of the Act and those officers posted in the Bureau of Investigation (Economic Offence) are the members of the taxation department and are responsible to the Commissioner of Taxes for proper administration of the provisions of the Act. They were deputed to the Bureau of Investigation (Economic Offence) an organisation set up by the Government of Assam with the conglomeration of the officers of various department, like supply, transport, excise, taxation, forest, weights and measures, even though they are functioning under the Bureau, they are to submit their reports of action to the Commissioner of Taxes under whose delegated power they are functioning and it is the Commissioner of Taxes, who entrusts the officers appointed to assist him in the respective territorial jurisdiction to dispose of such report in accordance with provisions of law. The officers deputed to the bureau are the part and parcel of the taxation department.

(3.) DR . Saraf, the learned counsel for the petitioner in support of his contention referred to Bench decision of this Court in Civil Rule Nos. 878 and 879 of 1972 (Mercantile Stores and Agency Company Pvt. Ltd., Balimara Tea Company Pvt. Ltd. v. A. Rahman, Inspector of Taxes, Dibrugarh disposed on April 1, 1975). Mr. H. N. Sarma, the learned Additional Senior Government Advocate, appearing on behalf of the respondents on the other hand submitted that the action of the respondents is lawful and relied upon records which were produced before me. Mr. Sarma, the learned counsel also relied upon a decision of the single Bench in Civil Rule No. 2147 of 1995 in Assam Agency v. Commissioner of Taxes, Assam disposed on February 25, 1997 (Reported in [1997] 106 STC 426 (Gauhati)). Before adverting and evaluating the respective contentions of the parties it would be pertinent to refer to the following provisions of the Act and the Rules :