1959 (4) TMI 18 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to search and seizure under Article 226 of the Constitution regarding sales tax evasion, authority of Sales Tax Officer to seize documents under section 14(3) of the Bengal Finance Sales Tax Act, delegation of seizure power to Sales Tax Officer, requirement of reasons for seizure, legality of retaining seized documents beyond 21 days.

Analysis:
The petitioner challenged the search and seizure of account books by the Sales Tax Officer under Article 226 of the Constitution, alleging unauthorized seizure. The Sales Tax Officer justified the seizure based on suspicion of tax evasion and the authority granted under section 14 of the Bengal Finance Sales Tax Act. The respondent argued that the power of seizure had been validly delegated to the Sales Tax Officer as per section 15 of the Act, with approval from the Commissioner. The court noted that the delegation was valid, even though the approval was from the Commissioner, not the Assistant Commissioner, finding no merit in this argument.

The petitioner contended that the Sales Tax Officer failed to provide reasons in writing for the seizure, but the court found this argument baseless as the seizure memo produced by the petitioner contained the reasons and details of the seized documents. Additionally, the petitioner claimed that no tax was due, thus no seizure was warranted. However, the court held that suspicion of manipulation in account books to evade tax was sufficient grounds for seizure under section 14(3) of the Act.

Regarding the retention of seized documents beyond 21 days, the petitioner argued that the sanction for retention was granted four days after the expiration of the 21-day period, making it illegal. The court acknowledged this discrepancy but deemed it insufficient to interfere with the order at that stage. Citing Rule 58, which allows retention beyond 21 days with the Commissioner's sanction, the court found the retention lawful in this case. Consequently, the court dismissed the petition, upholding the legality of the search and seizure, and ordered the petitioner to bear the costs.