2006 (11) TMI 561 - HC - VAT and Sales Tax

Summary

Issues:
1. Time-limit for returning documents produced following a notice under section 28(1) of the Kerala General Sales Tax Act, 1963.

Analysis:
The High Court of Kerala deliberated on the time-limit for returning documents produced after a notice under section 28(1) of the Kerala General Sales Tax Act, 1963. The petitioner, a dealer, had produced books of account upon receiving a notice in form 51 under rule 72 of the Kerala General Sales Tax Rules, 1963. The first respondent verified the books, seized them without authority, and did not return them, prompting the petitioner to file a writ petition seeking release of the seized records. Additionally, a notice under section 45A of the Act proposing a penalty was served on the petitioner, leading to another writ petition to stay further proceedings. The court highlighted the principles that the assessment period does not control revisional jurisdiction, and the exercise of revisional power must be within a reasonable period. In this case, the court found the notice dated September 4, 2006, seeking revision after five years to be arbitrary and set it aside.

The court examined the provisions of section 28 of the Act, which empower the order for production of accounts, and rule 72 of the Rules, which governs the issuance of notices for production of accounts. It was noted that neither the Act nor the Rules provide a specific time-limit for returning documents produced following a notice in form No. 51. The court rejected the argument that sub-rule (9) of rule 34, which sets time-limits for returning seized documents, applies to documents produced based on a notice under section 28(1). The court emphasized that the authority receiving the documents cannot retain them indefinitely without reasonableness regarding the time-frame.

Furthermore, the court balanced the interests of the Revenue department and the dealer, stating that documents should be returned within a fortnight of their production to uphold fairness and reasonableness. Consequently, the court directed the return of documents produced by the petitioner within two weeks of the judgment, with the option for the petitioner to certify copies if required. The court also instructed that proceedings initiated based on a previous notice should be finalized only after providing the petitioner with an opportunity to file objections following the document's return.