1993 (10) TMI 337 - HC - VAT and Sales Tax

Summary

Issues:
Retention of seized documents beyond the lawful period.

Analysis:
The petitioner, a public limited company engaged in manufacturing and sale of cattle feed, had its books of accounts seized during a survey in January 1991 by the Sales Tax Officer. The petitioner, under the belief that the books would be returned within 90 days, later discovered that the documents were not returned, hindering its ability to prepare financial statements for certain years. The petitioner approached the High Court seeking a mandamus to restrain the completion of assessment proceedings until the seized documents were returned.

In response, the Deputy Commissioner, Sales Tax, Varanasi, had issued orders for the retention of the seized books for specific periods, extending up to August 14, 1991. However, there was a gap between June 16, 1991, and June 18, 1991, where no order for retention existed, rendering the retention during that period illegal.

The petitioner argued that the subsequent approval for retention from July 15, 1991, to August 14, 1991, could not validate the illegal retention between June 16, 1991, and June 18, 1991. Citing a previous Division Bench decision, it was emphasized that approval obtained after the expiry of the lawful period for retention did not legitimize the continued retention of seized documents.

The Court, aligning with the legal principle established in the cited case, concluded that the retention of the seized documents beyond the lawful period was unauthorized and directed the respondent to return the documents to the petitioner within two weeks from the date of the Court's order presentation. The judgment favored the petitioner, highlighting the importance of adhering to lawful procedures in the retention of seized documents during tax assessments.

In conclusion, the Court's decision emphasized the necessity of adhering to legal provisions regarding the retention of seized documents during tax assessments, ensuring that such actions are conducted within the confines of the law to uphold the rights of the affected parties.