1961 (9) TMI 49 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the seizure of books of account.
2. Failure to issue a receipt for the seized books.
3. Non-return of the seized books within the statutory period.

Detailed Analysis:

1. Legality of the Seizure of Books of Account:
The petitioner, a munim, had his residence raided by the respondent, who was accompanied by officers from both the Sales Tax and Income-tax Departments. The respondent justified the raid under sections 7 and 13(1) of the U.P. Sales Tax Act. However, the court noted that neither section 7 nor section 13(1) authorized a raid or seizure of books. The court emphasized that the provisions for entry and inspection are found in sub-section (2) of section 13, which allows entry into the premises of a "dealer" for inspection at reasonable times by authorized officers. This case did not involve entry into a dealer's premises. Sub-sections (3) and (4) of section 13 allow for the seizure of books but only by an officer authorized by the State Government, and only if there are reasonable grounds to believe a dealer is evading tax liability. The respondent did not demonstrate such authorization or reasonable grounds, making the raid and seizure unwarranted by the Act.

2. Failure to Issue a Receipt for the Seized Books:
Sub-section (5) of section 13 mandates that the officer seizing the books "shall forthwith grant a receipt for the same." The respondent failed to issue a receipt at the time of seizure, despite the petitioner's repeated requests. The respondent's counter-affidavit claimed the petitioner refused to make a statement and left without taking the list (receipt). However, the court found this explanation suspicious and noted that the respondent should have issued the receipt immediately upon seizure. The court inferred that the respondent's failure to issue the receipt was a deliberate act to coerce the petitioner into making a statement, which is not sanctioned by section 13.

3. Non-return of the Seized Books within the Statutory Period:
The Act requires the officer to return the seized books within 90 days from the date of seizure. The respondent did not comply with this requirement, even after the petitioner requested the return of the books in writing. The respondent cited a letter from the Income-tax Officer requesting retention of the books as the reason for non-compliance. The court found this excuse untenable, noting that the letter did not justify overriding the statutory mandate. The court suspected the letter was written to extricate the Sales Tax Officer from his legal predicament. The court concluded that the respondent's conduct was in clear defiance of the law and appeared to be an attempt to terrorize the petitioner.

Conclusion:
The court found the respondent's actions to be in complete defiance of the statutory provisions of the U.P. Sales Tax Act. The respondent's failure to issue a receipt and return the books within the stipulated period, along with his attempt to coerce the petitioner, were deemed unlawful. The court ordered the issuance of a writ of mandamus directing the respondent to return all remaining books to the petitioner forthwith and awarded costs to the petitioner. An apology and undertaking from the respondent led the court to refrain from making him personally liable for costs. The judgment highlighted the expectation that public servants should obey and not break the law. The petition was allowed, and a copy of the judgment was ordered to be sent to the Commissioner, Sales Tax.

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