1978 (1) TMI 149 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the search and seizure under section 28(3) of the K.S.T. Act.
2. Authority of the respondent to conduct the search and seizure.
3. Legality of the retention of account books for an extended period.
4. Validity of the permission granted by the Deputy Commissioner of Commercial Taxes.

Detailed Analysis:

1. Legality of the Search and Seizure:
The petitioner challenged the legality of the search and seizure conducted by the Commercial Tax Officer (Intelligence), Belgaum, on the grounds that the procedural safeguards prescribed in the proviso to sub-section (2) of section 28 of the K.S.T. Act were not followed. The petitioner argued that the action was a clear case of search and seizure, not merely an inspection, as claimed by the respondent. The court observed that the procedural safeguards are crucial as they protect the fundamental rights of individuals under Article 19 of the Constitution. The court concluded that the impugned action was indeed a search and seizure, and the respondent failed to comply with the mandatory procedural safeguards, thus rendering the action illegal.

2. Authority of the Respondent:
The petitioner questioned the competence of the respondent to conduct the search and seizure, as no assessment proceedings were pending before him. The court did not delve deeply into this issue, as the first contention regarding the legality of the search and seizure was sufficient to dispose of the case. However, the court implicitly acknowledged the importance of procedural compliance by the respondent, which was not met in this case.

3. Legality of the Retention of Account Books:
The petitioner contended that the retention of the account books for an extended period was contrary to law. The court did not specifically address this issue, as the primary focus was on the legality of the search and seizure. Given the conclusion that the search and seizure were illegal, the retention of the account books was also implicitly deemed unlawful.

4. Validity of the Permission Granted:
The petitioner argued that the permission granted by the Deputy Commissioner of Commercial Taxes, Belgaum, was illegal, as he was not the next higher officer as contemplated by sub-section (3) of section 28 of the Act. Additionally, the permission was granted without hearing the petitioner on each occasion, and sometimes after the expiry of the previous permission period. The court did not address this issue in detail, as the primary contention regarding the illegality of the search and seizure was sufficient to grant the relief sought by the petitioner.

Conclusion:
The court held that the search and seizure conducted by the respondent were illegal due to non-compliance with the mandatory procedural safeguards under section 28(2) of the K.S.T. Act. The court directed the respondent to return all the seized articles, documents, and any copies or notes made from the seized documents within fifteen days. The petitioner was also awarded costs of the petition. The judgment emphasized the importance of procedural safeguards in protecting individual rights while enforcing the sales tax law.