1973 (4) TMI 94 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Constitutional validity of Section 28(3)(a) of the Kerala General Sales Tax Act, 1963.
2. Retention of books, records, and documents by the sales tax department beyond one month.
3. Alleged violation of Articles 14, 19(1)(f), and 19(1)(g) of the Constitution.
4. Issuance of a writ of mandamus for the return of seized documents.

Detailed Analysis:

Constitutional Validity of Section 28(3)(a):
The petitioners challenged the constitutional validity of Section 28(3)(a) of the Kerala General Sales Tax Act, 1963, specifically the provision allowing the retention of seized documents for more than 30 days if required for prosecution. They argued that this provision grants vague and wide powers to the Sales Tax Officer, which can be misused, thereby violating Article 14 of the Constitution. The court, however, upheld the provision, stating that it imposes reasonable restrictions protected by clauses (5) and (6) of Article 19. The court referenced several precedents where similar provisions in other states' Sales Tax Acts were upheld, emphasizing that the provision is in the public interest for the collection of taxes and prosecution of offenses under the Act.

Retention of Books, Records, and Documents:
The petitioners contended that the retention of their books and records beyond one month without returning them was unconstitutional. They argued that the provision does not authorize indefinite retention, which deprives them of their property and affects their business operations. The court clarified that the section does not permit indefinite retention and must be interpreted to balance the state's interest in tax collection and prosecution with the petitioners' rights. The court cited the principle from Ghani v. Jones, stating that records should not be retained longer than necessary and should be returned if copies suffice for prosecution.

Alleged Violation of Articles 14, 19(1)(f), and 19(1)(g):
The petitioners argued that the retention of their records violated their fundamental rights under Articles 14, 19(1)(f), and 19(1)(g) of the Constitution. They claimed that the provision was arbitrary, irrational, and unreasonable. The court rejected this argument, stating that the provision imposes reasonable restrictions necessary for public interest and tax administration. The court emphasized that the provision must be reasonably construed and cannot be deemed invalid merely because it might be misused in specific cases.

Issuance of a Writ of Mandamus:
The petitioners sought a writ of mandamus directing the respondent to return the seized documents. The court noted that criminal proceedings had already been initiated, and the records were produced before the District Magistrate's Court. Therefore, it would not be appropriate for the court to order the return of the documents. The petitioners were advised to move the District Magistrate's Court for the return of the records, and the court expressed confidence that the matter would be carefully considered and appropriate orders passed.

Conclusion:
The court dismissed the original petition, upholding the constitutional validity of Section 28(3)(a) of the Kerala General Sales Tax Act, 1963. The court clarified the scope and ambit of the power under the section, emphasizing the need to balance public interest with individual rights. The petitioners were directed to seek relief from the District Magistrate's Court regarding the return of their records. The court made no order as to costs.