1996 (2) TMI 473 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the search and seizure conducted by the Commercial Taxes Officer.
2. Compliance with procedural requirements under the Rajasthan Sales Tax Act and Rules.
3. Validity of the petitioner's statement and application for composition of the offence.
4. Applicability of Article 20(3) of the Constitution of India.
5. Admissibility of evidence obtained through illegal search and seizure.
6. Maintainability of the writ petition despite the availability of an alternative remedy.

Detailed Analysis:

1. Legality of the Search and Seizure:
The petitioner contended that the search and seizure conducted on January 20, 1988, were illegal as the Commercial Taxes Officer did not comply with the provisions of section 22 of the RST Act. The respondents admitted the seizure but claimed it was conducted lawfully. The court found that there was no recorded reason to suspect that the petitioner was evading tax, which is a sine qua non for search and seizure. The absence of an affidavit from any member of the raiding party further weakened the respondents' case. Consequently, the search and seizure were deemed illegal.

2. Compliance with Procedural Requirements:
The petitioner argued that the search did not comply with rule 58(2)(a) and rule 58(3) of the Rajasthan Sales Tax Rules, which require the presence of respectable witnesses from the locality and adherence to the procedures laid out in section 103 of the Criminal Procedure Code. The court found that the witnesses were not from the locality and that no list of seized goods was given to the petitioner or sent to the Commissioner, violating rule 58(2)(c). This non-compliance rendered the search and seizure illegal.

3. Validity of the Petitioner's Statement and Application for Composition:
The petitioner claimed that his statement and application for composition were made under duress, coercion, and undue influence. The court noted that the petitioner's affidavit, which detailed the coercive circumstances, was unchallenged by any counter-affidavit from the raiding party members. The court held that the statement and application, made under such conditions, were not binding on the petitioner.

4. Applicability of Article 20(3) of the Constitution of India:
The petitioner argued that his statement and application for composition should not be considered as he was in the position of an accused under Article 20(3) of the Constitution. The court rejected this argument, stating that no FIR or criminal complaint was filed against the petitioner before his statement was recorded. The proceedings were not criminal in nature, and thus Article 20(3) was not applicable.

5. Admissibility of Evidence Obtained Through Illegal Search and Seizure:
The court acknowledged that evidence obtained from illegal search and seizure could be admissible if relevant, as established in Pooran Mal v. Director of Inspection. However, given the specific circumstances, including the petitioner's unchallenged affidavit detailing coercion, the court decided to exclude the evidence obtained during the illegal search and seizure.

6. Maintainability of the Writ Petition:
The respondents argued that the writ petition was not maintainable as the petitioner had an alternative remedy of appeal under section 13 of the RST Act. The court recognized this but noted that the appeal clause barring appeals post-composition was added later in 1991. Given the petition's long-standing admission, the court chose not to dismiss it on these grounds.

Conclusion:
The writ petition was allowed. The respondents were directed to refund the composition fee of Rs. 19,224 with 15% interest per annum from the date of deposit to the date of refund within three months. No costs were awarded.