1993 (3) TMI 330 - AT - VAT and Sales Tax

Summary

Issues:
Interpretation of Section 14(5) of the 1941 Act regarding sealing of godowns for tax evasion.

Analysis:
The judgment focuses on the interpretation of Section 14(5) of the 1941 Act concerning the power of appropriate officers to seal godowns suspected of tax evasion. The applicant's advocate argued that Section 14(5) should be read in conjunction with the entire Section 14 to prevent arbitrary sealing of godowns by tax officers. The Tribunal agreed, stating that the power under Section 14(5) must be exercised under specific conditions, such as the necessity for a search or investigation based on evidence of tax evasion. The Tribunal emphasized that a Commercial Tax Officer cannot seal a godown without fulfilling the conditions precedent outlined in the law. The purpose of Section 14(5) is to seal a place of business only under specific circumstances related to tax evasion, not at the officer's discretion.

The Tribunal examined the impugned order dated February 12, 1993, which lacked recorded reasons necessary for sealing the godowns. The order indicated that the officer sealed the godowns because the person in charge did not open them due to the late hour, which was found to be untrue. The Tribunal noted that the order did not reflect the officer's reasons for deeming a search or entry necessary. The respondent attempted to justify the sealing in the affidavit-in-opposition, citing findings from previous days, but these reasons were not recorded in the order. The Tribunal held that the sealing was unjustified, arbitrary, and lacked the essential requirements mandated by Section 14(5) of the Act.

Consequently, the Tribunal quashed the impugned order dated February 12, 1993, directing the Commercial Tax Officer to unseal the godowns within forty-eight hours. The Tribunal did not allow the respondents to make a list of goods stored in the sealed godowns due to the invalidity of the order. Since the main issue was resolved, the Tribunal did not delve into other arguments or allegations made by the parties.

In conclusion, the Tribunal allowed the application, quashed the sealing order, and instructed the officer to unseal the godowns promptly. The judgment was delivered by the Tribunal, comprising Ray L.N. and Banerji P.C., JJ., with P.C. Banerji concurring. The writ petition was allowed, and no costs were awarded in the matter.