1971 (2) TMI 93 - HC - VAT and Sales Tax

Summary

Issues:
1. Seizure of account books during a raid
2. Validity of retaining seized account books for assessment purposes
3. Interpretation of Supreme Court's observation on returning seized material

Analysis:
1. The petitioner, a dealer in electrical goods, had his business premises raided, resulting in the seizure of account books and documents. The petitioner claimed the documents were seized, while the department argued they were handed over voluntarily. The legality of the seizure was questioned initially due to a violation of section 41 of the Tamil Nadu General Sales Tax Act. However, the Supreme Court upheld the validity of section 41 and ruled that account books seized without following the procedure under section 165 of the Code of Criminal Procedure should be returned to the assessee. The petitioner sought a writ of mandamus for the return of the seized account books, contending that the safeguards under section 165 were not followed during the search.

2. The judgment highlighted three distinct stages in the case: the seizure of account books, assessment proceedings by the revenue, and the return of the seized books to the assessee. Although the seizure was deemed illegal as per section 165 of the Code of Criminal Procedure, the revenue was justified in relying on the seized material for assessment purposes. Previous court decisions supported the notion that even if a search was illegal, the seized material could still be utilized for assessment proceedings. The revenue's argument that they were entitled to retain the books until the assessment was finalized was deemed reasonable, considering the ongoing assessment process with potential appeals and revisions.

3. The petitioner's counsel argued for the immediate return of the seized account books based on the Supreme Court's observation in a previous case. However, the court emphasized that the return of seized material should be viewed in a reasonable manner. It was concluded that the revenue could lawfully retain the account books until the assessment process was completed. Since the assessment proceedings were halted due to a court order, the revenue was within its rights to keep the seized material for the purpose of finalizing assessments. As there was no public duty compelling the revenue to return the account books at that moment, the court dismissed the writ petition, stating that a writ of mandamus is issued when there is a failure to perform a public duty, which was not the case in this instance.