1977 (10) TMI 96 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Privilege under Section 26 of the Punjab General Sales Tax Act.
2. Voluntary vs. Seized Documents.
3. Confidentiality and Waiver of Privilege.

Issue-Wise Detailed Analysis:

1. Privilege under Section 26 of the Punjab General Sales Tax Act:
The primary issue revolves around whether the documents sought by the plaintiff are privileged under Section 26 of the Punjab General Sales Tax Act. Section 26(1) states that all particulars contained in any statement, return, accounts, or documents produced in accordance with the Act are to be treated as confidential. The trial court had observed that the statements in dispute were made under the Act and thus were privileged from proof and production. The plaintiff challenged this, arguing that the documents in question were not produced voluntarily but were seized under Section 14(1) of the Act, and thus, the privilege should not apply.

2. Voluntary vs. Seized Documents:
The plaintiff's counsel argued that the documents were seized during a raid and not produced voluntarily by the assessee, thus not covered by the privilege under Section 26. The court referenced the judgment in Dalip Singh v. Dilbagh Rai, which held that the privilege does not extend to documents seized in a raid. The court noted that the statement of Gurdial dated 15th September 1971 was merely an acknowledgment of receipt for the books of account seized during the raid and thus could not be considered confidential under Section 26. Similarly, the second document, a statement by Baghu Ram, was also related to the seizure proceedings and was essentially a detailed receipt for the return of the seized books.

3. Confidentiality and Waiver of Privilege:
The plaintiff's counsel further argued that certified copies of the documents had already been furnished by the department, thereby waiving any privilege under Section 26. The court agreed, citing Ram Chandra v. Laxman Das, which held that obtaining certified copies of documents waives the privilege, allowing their production in court. The court emphasized that the confidentiality under Section 26 is intended to protect the documents from third parties, not from the parties themselves, especially in a dispute between partners of the firm. The court concluded that the documents were not confidential from the parties involved and thus not privileged.

Conclusion:
The court allowed the petition, set aside the trial court's order, and declined the privilege claimed by the department regarding the two specific documents. The parties were directed to appear before the trial court on 7th November 1977. The petition was allowed, and each party was instructed to bear its own costs.