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TMI Blog1977 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the guidance of the Special Officer and the overall control of' the Finance Department. (iii) Such number of officers and staff as may be considered necessary and sanctioned by the Governor from time to time to assist the Special Officer and the Superintendent of Police in the discharge of their duties. The Headquarters of the Bureau will be in the Writers' Buildings for the present. The Bureau will start functioning immediately. The necessary expenditure for the creation of the Bureau shall be met from the Budget under the head '12-Sales Tax' of the current financial year. ORDER Ordered that the Resolution be published in the 'Calcutta Gazette' for general information. Ordered also that copies of the Resolution be sent to all Departments of this Government, all District Magistrates, the Accountant-General, West Bengal, Calcutta, and the Commissioner of Commercial Taxes, West Bengal." It will be necessary to refer to some prior events relating the appointments of some officers of the Commercial Tax Directorate, who were since posted in the Bureau. These relate to the appointment of (1) Nikhllesh Chandra Biswas and on his retirement, Ashit Kumar Roy, (ii) Sanj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. dated 17th July, 1970, read with section 15 of the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), I hereby delegate to the officers specified under column (4) below the following powers under section 14 of the said Act as described to be exercised in respect of dealers within the whole of State of West Bengal: 1 14 To require production of the Commercial Tax Officers, accounts, registers and docuInspectors, who are placed ments, of any dealer and to in the Bureau of Investirequire him to furnish any gation. information referred to in sub-section (1) of section 14 of the Act. 2 14 To inspect the accounts, do. registers or documents of a dealer. 3 14 To enter and search any place do. of business of any dealer or any other place as referred to in sub-section (4) of section 14, for the purposes of sub-section (2) or sub-section (3) of the same section. 4 14 To seize accounts, registers do. or documents of any dealer and to exercise all powers under sub-section (3) of section 14 of the Act. (Sd.) N. C. Biswas, 14th November, 1970. Additional Commissioner, Commercial Taxes." By order of 19th April, 1972, A. K. Roy was appointed in place of N. C. Biswas; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 (Ben. Act VI of 1941), the Governor is pleased hereby to specify the whole of the State of West Bengal as the area over which Shri Sanjib Bhusan Ghatak, Inspector of Commercial Taxes, appointed as Inspector-cum-Investigator in terms of the Department Order No. 1450-F.T. dated 23rd April, 1971, shall exercise jurisdiction." (III) Subodh Kumar Chatterjee, a Commercial Tax Officer, Grade I, was appointed in the Bureau by the following order: "Notification, Calcutta, the 5th June, 1970. The Governor is pleased to appoint Shri Subodh Kumar Chatterjee, Commercial Tax Officer, Grade I, as Commercial Tax Officer-cum-Investigating Officer in the Bureau of Investigation and to post him there with effect from the date he assumes charge until further orders." It was further stated that necessary steps for his release should be taken at an early date. There was a similar order extending his jurisdiction to the whole of the State of West Bengal. The order is as follows: "Notification, Calcutta, the 17th July, 1970. In exercise of the power conferred by sub-section (1) of section 3 of the Bengal Finance (Sales Tax) Act, 1941 (Ben. Act VI of 1941), the Governor is pleased hereby to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bureau, seized the books of account and a seizure receipt was given to the petitioner. The petitioner was informed by S.K. Chatterjee by a letter that he was carrying on business in clandestine manner at 9, Lal Bazar Street, Calcutta, although the registration certificate was granted to him in respect of a different place of business. As the documents were not returned even after 21 days, the petitioner moved an application under article 226 of the Constitution praying for issue of a writ in the nature of mandamus directing the State of West Bengal and its concerned officers to return the books of account to the petitioner and also for a writ in the nature of certiorari quashing the investigation proceedings. On this application a rule nisi was issued by this court, which was opposed by the State of West Bengal and its concerned officers. Pal, J , accepting the contentions of the petitioner, held that the State Government in exercise of its executive power, which under article 162 is coextensive with legislative power, was competent to constitute the Bureau by notification and such power need not be circumscribed by specific legislation. It was further held that the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d disclosure. On the failure of the partners of the firm to comply with the requisition, the Investigating Officer of the Bureau on 17th April, 1971, seized the accounts and records of the firm purporting to take action under section 14(3) of the said Act and a receipt was granted therefor. The petitioners challenged the search and seizure as being illegal as the Bureau was not validly constituted nor the officers were validly empowered to search and seize; further the petitioners were not bound to disclose the relevant books of account relating to the disclosure and all actions taken were mala fide without reasonable satisfaction of the authorities to direct search and seizure. At the hearing of the rule, which was opposed by the State and its concerned officers, the learned Judge held that constitution of the Bureau was legal as the Government was entitled in the discharge of its executive functions to evolve administrative machinery not inconsistent with existing law, as would subserve its purpose. On interpretation of clause (8) of section 68 of the Finance Act, 1965, it was held that there was no embargo on officers under other statute to call for particulars of the disclosu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may constitute a Bureau of Investigation for discharging the functions referred to in sub-section (3). (2) The Bureau of Investigation (hereinafter referred to as the Bureau) shall consist of an Additional Commissioner of Commercial Taxes (hereinafter referred to as the Special Officer) and such number of other persons appointed under sub-section (1) of section 3 to assist the Commissioner of Commercial Taxes as the State Government may deem fit to appoint. (3) The Bureau may, on information or of its own motion, or when the State Government so directs, carry out investigation or hold inquiry into any case of alleged or suspected evasion of sales tax as well as malpractices connected therewith and send a report in respect thereof to the Commissioner. (4) The Bureau may, for the purpose of holding investigation or inquiry referred to in sub-section (3), exercise all the powers referred to in sections 14 and 14A. (5) The Bureau may, after a case has been investigated or inquired into by it, by order, assess, reassess, collect or enforce payment of sales tax in the case, under this Act. (6) The Special Officer shall assign such functions of the Bureau to such of the offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment) Ordinance, 1973, is hereby repealed. (2) Anything done or any action taken under the said Act as amended by the Bengal Finance (Sales Tax) (Amendment) Ordinance, 1973, shall be deemed to have been validly done or taken under the said Act as amended by this Act as if this Act had commenced on the 24th day of September, 1973." The learned Advocate-General and Mr. Ganendra Narayan Roy took great pains to establish that even without the Ordinance and the Act following it, the constitution of the Bureau and the appointment of the officers therein and the actions taken by them were validly made and the judgment of Pal, J., was unsustainable. In view of the promulgation of the Ordinance and later on in its place the Act, both with retrospective effect from the date of inception of the original Act, we have refrained from considering the position as suggested as it would mean an academic discussion ending in futility. We shall consider the position in law with reference to the said Act as amended by the Ordinance and later on by the Amendment Act referred to above. Mr. Arun Prakash Chatterjee, the learned Advocate appearing for the respondent submitted that the Bureau of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ordinance and the amending Act repealing the Ordinance, certain provisions thereof were made retrospective since the date of inception of the original Act. Section 19A provides for the constitution of the Bureau of Investigation and this section was made retrospective. As a result the constitution of the Bureau by the Government is to be deemed in discharge of the functions in pursuance of the specific provisions of section 19A of the original Act, which, as we have seen, is to be deemed always to he in the said Act. The Bureau so constituted has thus the statutory authority as its basis and is an integral part of the organisation of the Commercial Tax Directorate constituted under the same Act for the purpose for which the said Act was enacted. The next contention raised on behalf of the respondent, who has to support the judgment in view of the Ordinance and the amending Act, is that the officers of the Commercial Tax Directorate as soon as they were appointed in the Bureau were denuded of their powers of search and seizure which they might have as officers under the said Act, as they ceased to be such officers of the Directorate. In the context of the Ordinance and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the officers concerned, namely, the Commercial Tax Officer and Inspector of the Directorate, posted in the Bureau and designated respectively as Investigating Officer and Inspector-cum-Investigator in view of the delegation and amendments in the said Act had and must be deemed to have the powers of search and seizure under the said Act in respect of the books of account and records of the dealers concerned. The contention of the petitioners in the connected rule to the contrary is thus not sustainable. It was held in the judgment under appeal that the officers of the Bureau are outside the administrative control of the Commissioner of Commercial Taxes, West Bengal. The reason of the finding was that the Bureau was outside the Commercial Tax Directorate, constituted as it was by the Government Resolution without statutory basis, so that the officers in the Bureau ceased to be officers of the Tax Directorate, which officers only were conferred with the powers of search and seizure. Whatever may be the position before the Ordinance, the Bureau is and always is to be deemed a part of the Commercial Tax Directorate with a statutory basis under the Bengal Finance (Sales Tax) Act, 1941 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Chatterjee next submitted that the impugned amendment seeks impliedly or expressly to nullify the judgment as is obvious from the objects and provisions of the amending Act. He referred to the decision In Municipal Corporation of the City of Ahmedabad v. New Shrock Spinning and Weaving Co. Ltd.A.I.R. 1970 S.C. 1292., where the court was considering the provisions in section 152A Inserted by the Gujarat Amendment Act, 1968, to the Bombay Provincial Municipal Corporation Act, 1949. By the said section the Corporation was given power to refuse refund of the amount illegally collected as property tax despite the orders of the High Court and the Supreme Court and to adjust the same against tax as would be assessed later and in the meantime to treat such amount as loan carrying interest. The court quoted with approval the following observation in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1971] 79 I.T.R. 136 (S.C.) A.I.R. 1970 S.C. 192.: "A court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily a court holds a tax to be inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Finance Act, 1965. Reliance was placed on clause (8) of section 68 of the Act, which is as follows: "(a) All particulars contained in any declaration made under this section or record of any proceeding under this section shall be treated as confidential and, notwithstanding anything contained in any law for the time being in force, no court shall be entitled to require any public servant to produce before it any such declaration or record or any part thereof or to give evidence before it in respect thereof. (b) No public servant shall disclose any particulars contained in any such declaration or record except to any officer employed in the execution of any of the Acts mentioned in sub-section (5) or to any officer appointed by the Comptroller and Auditor-General of India or the Board to audit income-tax receipts or refunds." In agreement with the learned Judge, we are also of the opinion that the embargo is upon the public officers or to whom the declaration is made. It does not prevent the authorities under other Acts to call for requisite particulars from the assessee if they are otherwise authorised under the law. The Commissioner under section 14 may require the dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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