1982 (1) TMI 162 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction and authority of the respondent under Section 28(1) of the Karnataka Sales Tax Act.
2. Compliance with Section 165 of the Code of Criminal Procedure.
3. Validity of the search and seizure under Section 100 of the Code of Criminal Procedure.
4. Indiscriminate seizure of documents.
5. Issuance of receipt for seized documents under Section 28(3) of the Karnataka Sales Tax Act.

Issue-wise Detailed Analysis:

1. Jurisdiction and Authority of the Respondent:
The petitioner argued that the respondent-Commercial Tax Officer (CTO) was not authorized under Section 28(1) of the Karnataka Sales Tax Act due to a notification under Section 3B(4)(a) of the Act. The court held that the State Government's power to appoint officers under Section 3(1) of the Act overrides the Commissioner's power under Section 3B(4)(a). The court emphasized that Section 28 is a special provision that should prevail over the general distribution of jurisdiction. The respondent was duly empowered by a notification dated February 1, 1977, to exercise the powers under Section 28. Therefore, the first proposition was rejected.

2. Compliance with Section 165 of the Code of Criminal Procedure:
The petitioner contended that the search and seizure were illegal due to non-compliance with Section 165 of the Code of Criminal Procedure, as established in Jhaver's case. The court examined the records and found that the respondent had recorded reasonable grounds for the search, formed an opinion that the evidence could not be obtained otherwise, and specified the items sought. The court concluded that the four prerequisites set by the Supreme Court in Jhaver's case were fulfilled, and thus, the search was not arbitrary or illegal.

3. Validity of the Search and Seizure under Section 100 of the Code of Criminal Procedure:
The petitioner argued that the search was vitiated as the witnesses were not from the locality, contrary to Section 100 of the Code of Criminal Procedure. The court held that the presence of independent witnesses, rather than their locality, is crucial. Citing Radha Kishan v. State of Uttar Pradesh, the court noted that non-local witnesses render the search irregular, not illegal. The court found that the witnesses' affidavits claiming they were brought after the search were not credible, given the police records and the absence of any complaint from the witnesses at the time.

4. Indiscriminate Seizure of Documents:
The petitioner claimed that the seizure was indiscriminate and not directed against specific documents evidencing tax evasion. The court referred to Neminath Brothers' case and found that the respondent had applied his mind to each document seized, recording reasons for their relevance. The court also cited Pooran Mal v. Director of Inspection, noting that some latitude must be permitted in examining documents during a search. The court concluded that the seizure was not indiscriminate or a fishing expedition.

5. Issuance of Receipt for Seized Documents:
The petitioner argued that no receipt was issued for the seized documents, contrary to Section 28(3) of the Act. The court found that the seizure order, which detailed the seized documents and was left at the premises after the partner refused to accept it, constituted a sufficient receipt. The court noted that there is no prescribed form for the receipt, and the seizure order itself fulfilled the requirement.

Additional Ground:
The petitioner raised an additional ground regarding the retention of documents beyond 60 days without permission. The court found that permission for retention beyond 60 days was sought and granted periodically, thus complying with the proviso to Section 28(3) of the Act.

Conclusion:
The court concluded that the search and seizure conducted on January 16, 1981, were not illegal. The petition was dismissed without issuing a rule, and no order as to costs was made.

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