1997 (9) TMI 588 - AT - VAT and Sales Tax

Issues Involved:
1. Legality of the search and seizure of the applicant's books of accounts.
2. Compliance with procedural requirements for search and seizure under the West Bengal Sales Tax Act, 1994.
3. Validity of the recorded reasons for the search and seizure.
4. Adequacy of witness presence during the search and seizure.

Issue-wise Detailed Analysis:

1. Legality of the Search and Seizure of the Applicant's Books of Accounts:

The applicant, a firm registered under the Indian Partnership Act, 1932, challenged the search and seizure of its books of accounts conducted on March 1, 1996. The applicant argued that the search and seizure were conducted without proper grounds and that the officers forcibly took out the books of accounts and documents from the residence of one of the managers, Shri Krishna Kumar Saraogi, in his absence. The applicant contended that the officers threatened the female members of Shri Saraogi's family and prepared a common seizure receipt for the applicant and Shri Saraogi, which the applicant claimed was improper.

2. Compliance with Procedural Requirements for Search and Seizure under the West Bengal Sales Tax Act, 1994:

The respondents, in their affidavit-in-opposition, stated that the search was conducted based on specific information that the books of accounts were being kept at 165, Mahatma Gandhi Road, Calcutta-7, and not at the applicant's registered place of business. The respondents argued that the search and seizure were conducted in the presence of a witness, Shri L.K. Agarwal, and that the discrepancies found in the books of accounts justified the seizure. The respondents also denied any threat to the female members of Shri Saraogi's family and asserted that the seizure was conducted in accordance with the law, with reasons for the seizure being recorded in writing prior to the action.

3. Validity of the Recorded Reasons for the Search and Seizure:

The applicant's counsel, Mr. M.L. Bhattacharya, argued that the recorded reasons for the search and seizure were vague and did not provide specific grounds for suspicion of tax evasion. He contended that the reasons were self-contradictory and that the seizure receipt was prepared after the seizure had already taken place, indicating a procedural lapse. In response, the respondents' counsel, Mr. K.K. Saha, argued that the reasons recorded indicated a valid suspicion of tax evasion based on the discrepancies found in the books of accounts. He cited legal precedents to support the argument that possession for inspection is not equivalent to seizure and that the seizure was conducted after proper recording of reasons.

4. Adequacy of Witness Presence During the Search and Seizure:

The applicant argued that the seizure receipt did not bear the signature of any witness and that the absence of the witness's address made it impossible to verify the witness's independence. The respondents countered that the search and seizure were witnessed by Shri L.K. Agarwal, whose signature was on the recorded reasons and the seizure receipt. They argued that the presence of one witness, rather than two, was sufficient compliance with the statute, and that the witness's address was not crucial as he was an employee of the applicant and known to them.

Conclusion:

The Tribunal dismissed the application, holding that the search and seizure were conducted in compliance with the West Bengal Sales Tax Act, 1994. The Tribunal found that the recorded reasons for the search and seizure were valid and based on specific discrepancies in the books of accounts. The Tribunal also held that the presence of one witness was adequate compliance with the statute and that the absence of the witness's address did not invalidate the seizure. The application was dismissed with no order as to costs.

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