1993 (9) TMI 339 - AT - VAT and Sales Tax

Summary

Issues Involved: Validity of seizure of books of account and documents.

Issue-wise Detailed Analysis:

1. Validity of Seizure:
The primary issue in these applications under Section 8 of the West Bengal Taxation Tribunal Act, 1987, was whether the books of account and documents were validly seized. The applicants, all registered dealers under the Bengal Finance (Sales Tax) Act, 1941, and the Central Sales Tax Act, 1956, contended that the seizures conducted on August 12, 1992, were arbitrary and illegal. They argued that there was no reason to suspect that they were attempting to evade tax, the seizures were not attended by independent witnesses, and the reasons for suspicion were not recorded in writing prior to the seizures.

2. Requirement of Recording Reasons for Seizure:
The applicants argued that the authority making the seizure should have a reason to suspect that the dealer is attempting to evade tax, and such reason should be recorded in writing before the seizure. The Tribunal noted that the language used in the closing portions of the recorded reasons indicated that the seizures had been effected and the seizure receipts had been prepared and made over to the persons concerned prior to the point of time when the reasons were recorded or the "reports" were written up. Thus, the Tribunal concluded that the reasons were recorded after the seizures had already been effected, which contravened Section 14(3) of the 1941 Act.

3. Compliance with Section 100 of the Criminal Procedure Code:
The applicants contended that the seizures were invalid due to non-compliance with Section 100 of the Criminal Procedure Code, which requires the presence of independent witnesses during searches and seizures. The Tribunal, however, did not delve into this contention as it had already determined the seizures to be invalid based on the failure to record reasons prior to the seizures.

4. Retention of Seized Books and Documents:
The applicants argued that there was no reason for the respondents to retain the seized books of account and records, as assessments were deemed to have been made up to June 30, 1990, in terms of Section 11E(1) of the 1941 Act. The Tribunal did not address this contention, given its decision on the invalidity of the seizures based on the failure to record reasons.

5. Respondents' Request to Retain Xerox Copies:
The respondents requested that they be allowed to prepare Xerox copies of the seized documents and retain them for investigation purposes if the Tribunal ordered the return of the seized books and documents. The Tribunal referred to a similar case, J.D. Casting and Forging, where such a request was refused and decided not to deviate from that precedent.

Conclusion:
The Tribunal allowed all four applications, declaring the seizures of books of account and documents effected on August 12, 1992, as invalid. The respondents were directed to return all the seized books of account and documents immediately as per the respective seizure receipts. The applications were disposed of without any order for costs.