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TMI Blog1988 (6) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... arious show rooms outside the State of Karnataka. In order to verify the correctness of such transactions and also to verify whether the dealer is complying with the provisions of the Karnataka Sales Tax Act, the inspection of the office was taken up and at that time, an officer of the appellant-company was present who made available the required books of accounts and other documents. A preliminary verification of the relevant documents revealed certain discrepancies. Thereafter the said officer in exercise of his power under section 28(3) of the Karnataka Sales Tax Act seized the documents from the said officer of the appellant as listed below: Exhibit A-1 One box file containing stock transfer invoices October, 1983 to July, 1984. Exhibit A-2 One box file containing stock transfer invoices July, 1984 to September, 1984. Exhibit A-3 One box file containing stock transfer invoices December, 1984 to September, 1984. Exhibit A-4 One box file containing stock transfer invoices for June, 1986 onwards. Exhibit A-5 One box file containing stock transfer invoices 30th September, 1985 to May, 1986. Exhibit B-I One indent book 16th February, 1985 to 22nd December, 1985. A perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances as to whether in a particular case the seizure can be said to be one as a result of "inspection" or "search" and observed: "All searches are inspections, but all inspections are not searches. A search is a thorough inspection of a man's house, building or premises or of his person, with the object of discovering some material which would furnish evidence of guilt for some offence with which he is charged. It implies a prying into hidden places for that which is concealed. If the object sought for is always in plain sight, then there is no search. If the private account books had been kept in the counter openly at all times and they could have been found on inspection at any time of the day, then the seizure of such account books cannot be said to have been made after a search." Thus though there is distinction between "search" and "inspection" as noticed by the Supreme Court and this Court in the aforesaid decisions, it is only in Harikisandas Gulabdas Sons v. State of Mysore [1971] 27 STC 434 this Court considered the scope of "inspection" and observed as follows: "If his intention was to inspect and verify the accounts of the petitioner, he would have called for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the officer only wishes to inspect the accounts, registers or other documents under the first and the second sub-sections of section 41. There is no requirement of recording of reasons at that stage, because all that the officer has to do is to go and ask the dealer to produce his account books for his inspection." It is in those circumstances the observation quoted by his Lordship in his judgment was made by the Supreme Court, which is not the position here. In our view the said observations are wholly inapplicable to the facts of the case. The passage quoted, explains the scope and ambit of inspection and seizure of the documents and books and does not deal with a situation and circumstances in which what started as an inspection may become a search. Therefore with great respect to the learned judge, we cannot agree that the observations in the decision of Harikisandas Gulabdas and Sons [1971] 27 STC 434 (Mys) are only obiter and must be confined to the facts of the case. Indeed the facts and circumstances of that case are fully apposite to the cases on hand. Surprise inspection though permissible as held in Chandrika Sao v. State of Bihar [1963] 14 STC 398 by the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion either. The matter has been the subject of rulings of the Supreme Court as well as this Court. The Supreme Court, in Commissioner of Commercial Taxes v. R.S. Jhaver [1967] 20 STC 453; AIR 1968 SC 59, upheld the order of the High Court of Madras in regard to such a direction that had been made. The matter was considered by this Court in Harikisandas Gulabdas Sons v. State of Mysore [1971] 27 STC 434 and a Bench of this Court rejected such a contention that had been urged by the department. In that case, this Court made pointed reference to the decision of the Madras High Court which had been upheld by the Supreme Court in [1967] 20 STC 453; AIR 1968 SC 59 (Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver). We are not disposed to take a different view. However, the learned counsel for the appellant urged that the department was entitled to make use of the materials even though they might have been got illegally and referred to the observations of the Supreme Court in Pooran Mal v. Director of Inspection AIR 1974 SC 348. That principle is in no way effected or attracted in the instant case. If the department had made use of such material and passed an assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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