1998 (4) TMI 528 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the seizure of books of accounts and documents.
2. Refund of Rs. 50,000 paid by the applicant.

Issue-wise Detailed Analysis:

1. Legality of the Seizure of Books of Accounts and Documents:

The applicant, a manufacturer of industrial rubber goods, contested the seizure of his books of accounts and documents by the Commercial Tax Officer (CTO) on February 21, 1997. The applicant argued that the officers seized the documents without proper identification, did not provide a receipt, and coerced him into paying Rs. 50,000 under the threat of coercive actions. The respondents countered that they acted on secret information suspecting tax evasion under the West Bengal Sales Tax Act, 1994. They asserted that discrepancies were found during the examination of the applicant's records, which justified the seizure.

The Tribunal found that the respondents' examination of the books was "careless and perfunctory." The returns filed by the applicant, which were already in the possession of the tax authorities, showed sales figures far exceeding those recorded in the seized documents. The Tribunal concluded that the respondents' suspicion of tax evasion was based on a "wrong premise" and that the seizure was a "roving and fishing enquiry" without bona fide reasons. Therefore, the Tribunal quashed the seizure as invalid.

2. Refund of Rs. 50,000 Paid by the Applicant:

The applicant claimed that he paid Rs. 50,000 under coercion from the tax officers, who allegedly promised to release the seized documents upon payment. The respondents denied this, asserting that the payment was made voluntarily as advance tax. The Tribunal found no conclusive evidence to support either claim. Consequently, it could not determine that the payment was made under coercion. However, the Tribunal ordered that the amount should be adjusted towards future tax payments by the applicant.

Judgment:

The Tribunal allowed the application in part. It quashed the seizure of the books of accounts and documents and directed the respondents to return the seized items within 48 hours. The sum of Rs. 50,000 paid by the applicant was to be adjusted against future tax payments. There was no order as to costs.