9911796707
TMI Blog1992 (9) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... West Bengal, went to the applicant's residence at 28/5, Dobson Road, Howrah, the office and godown of the applicant at 4, Chandni Chawk Street, Calcutta 700 072 and his godown at 12B, Beliaghata Road, Calcutta 700 015, simultaneously for searching and seizing the applicant's books of accounts and stock of goods. Some of these officers seized various books of accounts and documents from the office of the applicant at 4, Chandni Chawk Street on preparing a seizure-receipt under section 14(3A) of the Act of 1941 in the presence of one Gyasur Rahaman, one of the employees of the applicant. At 6.30 p.m. on April 11, 1990 one Mr. Debasis Basu, Inspector of Commercial Taxes attached to the Bureau of Investigation sealed two inside rooms at the second floor of 4, Chandni Chawk Street, Calcutta, under section 14(5) of the Act of 1941 in the presence of Shri Sharad Kumar Goel, the son of the applicant, on preparing a report by which the dealer or the person-in-charge of the sealed two rooms was directed to appear before Shri Debasis Basu either personally or through an authorised agent on April 12, 1990 or at such subsequent date and hour to which the proceedings may be adjourned and to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces such as purchase bills, stock inventory against the imported notified goods which were found by the respondent No. 4 lying inside the two rooms at the second floor of that premises, after unsealing of these two rooms in the presence of Shri Sharad Kumar Goel. On May 2, 1990 another letter was written by Shri Sharad Kumar Goel to the respondent No. 4 for fixing another date due to his inability to produce evidence, as required by the respondent No. 4 on May 2, 1990. 3.. The further case of the applicant is that on May 4, 1990 Shri Apurba Kumar Ghosh, Inspector of Commercial Taxes, Bureau of Investigation, unsealed two inside rooms at the second floor of 4, Chandni Chawk Street, Calcutta which was sealed on April 25, 1990 and that thereafter one room at the second floor of that premises was again sealed by him after making inventories of goods of another room at the second floor of that premises No. 4, Chandni Chawk Street, Calcutta. In the report prepared by Shri Kalidas Chowdhury on May 4, 1990, the dealer or the person-in-charge of the sealed room was directed to appear on May 5, 1990 or on any adjourned date before Shri Apurba Kumar Ghosh for making arrangement for immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to release the seized goods within 48 hours on deposit of Rs. 25,000 by the applicant in cash as security and (iv) to allow the applicant to take xerox copies of books of accounts seized on April 11, 1990, at the cost of the applicant. Thereafter inventory of the goods lying at 12B, Beliaghata Road, Calcutta, was made. On June 20, 1990, one gate pass book used as road challan was seized from the godown of the applicant at 12B, Beliaghata Road on preparation of a seizure-receipt under section 14(3A) of the Act of 1941. On June 25, 1990, various notified goods mentioned in two inventories dated June 20, 1990 and June 21, 1990, signed by Shri Sharad Kumar Goel were seized by the respondent No. 4 from the godown of M/s. Tracto-Shovel Corporation in the compound of M/s. Gupta's Pencil Industry at 12B, Beliaghata Road, Calcutta, under section 14A(1)(ii)(b) of the Act of 1941 on preparation of an order. On that date (June 25, 1990) several other notified goods, as mentioned in stock inventory in separate sheets dated June 20, 1990 and June 25, 1990 signed by Shri Sharad Kumar Goel, were also seized by the respondent No. 4 from premises No. 4, Chandni Chawk Street, Calcutta, under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the goods. The prayers in Case No. RN-341 of 1990 are for cancelling the notice dated July 2, 1990 in form No. VII-M for determination of the value of the goods seized on June 25, 1990, the seizures made on June 20, 1990 and June 25, 1990 as well as April 11, 1990 as well as for cancelling the letter dated June 30, 1990, relating to the notice dated June 2, 1990, under section 14(1) of the Act of 1941 for production of books of accounts and documents relating to the business of the applicant for the three years commencing from 1987-88 and for explaining the books/records seized on April 11, 1990. 6.. The case of the respondents is that on receipt of reliable information that the applicant had been adopting illegal practices in a bid to avoid payment of due sales tax, three teams of officers of the Bureau of Investigation paid visits on April 11, 1990, to the office of the applicant at 4, Chandni Chawk Street, Calcutta, his warehouse at the same premises and another warehouse at 12B, Beliaghata Road, Calcutta. Another visit was paid on that date to the applicant's residence at 28/5, Dobson Road, Howrah. At 4, Chandni Chawk Street, Calcutta, the officials came upon a good number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bureau of Investigation were then compelled to seal the warehouse. Nothing incriminating was found on April 11, 1990 at the residence of the applicant at 28/5, Dobson Road, Howrah. At the request of Shri S.K. Goel for early unsealing of the sealed rooms, a team of officials of the Bureau of Investigation unsealed on April 25, 1990, the two rooms at the second floor, which were locked on April 11, 1990 and found that a substantial quantity of spares and accessories of tractors were lying on the floor of the two rooms. Shri S.K. Goel pleaded his inability to produce evidences and documents in respect of those goods. A few big almirahs were found in the two rooms at the second floor of that premises. Upon failure of Shri S.K. Goel to open two almirahs on the alleged reason of non-possession of the keys, the rooms were again sealed after observance of legal formalities. Not a single piece of goods was seized or taken away by the officials of the Bureau of Investigation on April 25, 1990. 7.. On May 4, 1990, the officials of the Bureau of Investigation unsealed the two rooms at the second floor of premises No. 4, Chandni Chawk Street, Calcutta, and asked the dealer to furnish necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icials. This gave rise to the belief that the applicant had been avoiding the payment of due taxes. The gate pass book was accordingly seized on June 20, 1990, after observing all legal formalities. In course of preparation of the stock inventory, the respondents found a substantial quantity of notified goods. The representative of the applicant-dealer was requested to substantiate the purchase of those goods with reference to connected papers. The representative having failed to do so, these goods were seized on June 25, 1990 from 12B, Beliaghata Road, Calcutta, as well as from premises No. 4, Chandni Chawk Street, Calcutta, under the belief that the applicant had been adopting illegal practices in a bid to evade the payment of due taxes. It is alleged that notices for determination of the value of the seized goods were issued to the applicant-dealer to give him an opportunity to represent his case. The applicant did not comply with the instructions contained in the notices. The case of the respondents is that the applicant-dealer was not able to produce any permit to substantiate the valid transportation of the notified goods. He could not furnish necessary papers relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commissioner or any person appointed under sub-section (1) of section 3 to assist him, shall grant a receipt for any of the accounts, registers or documents seized by him under sub-section (3) and shall retain any of them only for such period as may be necessary for examination thereof or for prosecution or for any of the purposes of this Act: Provided that- (a) the Commissioner shall not retain any of the accounts, registers or documents seized by him under sub-section (3) for a period exceeding one year from the date of the seizure unless he records, in writing, the reasons therefor, and (b) any person, appointed to assist the Commissioner under sub-section (1) of section 3, shall not retain any of the accounts, registers or documents seized by him under subsection (3) for a period exceeding one year from the date of seizure unless he states the reasons in writing therefor and obtains sanction, in writing, of the Commissioner in respect thereof: ............ (4) For the purposes of sub-section (2) or sub-section (3) the Commissioner or any person appointed under sub-section (1) of section 3 to assist him, may enter and search any place of business or warehouse of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om such goods are seized or the owner of such seized goods (when particulars of the owner are available) or, in the case of notified goods for which there is no claimant, upon any person who subsequently claims the ownership or possession of such notified goods; as the Commissioner considers appropriate in the facts and circumstances of the case, after giving such person or owner, as the case may be, a reasonable opportunity of being heard, a penalty of a sum not exceeding twenty-five per centum of the value, determined by him in accordance with the rules made under this Act, of such notified goods transported in contravention of the provisions of section 4B. (3) to (10)........................." The relevant rule 70A in the Rules of 1941 for searches and seizures is set out below: "70A(1) All searches and seizures under sections 14 and 14A shall, as far as possible, be made in accordance with the provisions of the Code of Criminal Procedure, 1973: ........................... (1A) The power under sub-section (5) of section 14 to seal any room, warehouse, almirah, safe, box or container shall be exercised in cases where the person or dealer in occupation or in possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 14A(1)(ii)(b) of the Act of 1941. The seizure of the gate pass book from the godown at 12B, Beliaghata Road on June 20, 1990, was on the basis of the provisions in section 14(3A) of the Act of 1941. The notice dated May 24, 1990, which is under challenge in Case No. RN-279 of 1990 was issued under section 14A(2) of the Act of 1941 read with rule 90A(2) of the Rules of 1941. The notice dated June 2, 1990, under challenge in RN-341 of 1990 was issued under section 14(1) of the Act of 1941. The notice dated July 2, 1990 under challenge in RN-341 of 1990 was issued under section 14A(2) of the Act of 1941 read with rule 90A(2) of the Rules of 1941. 12.. Mr. Gopal Chakraborty, learned Advocate for the applicant, has challenged the seizures made on these different dates on several grounds. The first contention of Mr. Chakraborty is that the searches and seizures on April 11, 1990, from 4, Chandni Chawk Street, Calcutta, were made in the absence of Shri S.K. Goel, the son of the applicant. Mr. Gopal Chakraborty has drawn our attention to the averments in paragraph 14 of the applications under section 8 of the West Bengal Taxation Tribunal Act, 1987, in both the cases. It is st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously on April 11, 1990, for searching and seizing the applicant's books of accounts and stock of goods cannot be true to the knowledge of the applicant, as alleged in the affidavit accompanying the applications under section 8 of the West Bengal Taxation Tribunal Act, 1987. In the affidavit-inopposition filed in the two cases, the respondents have nowhere stated that they raided these three places simultaneously. There is no affidavit by Shri S.K. Goel that he was not present at the time of the seizure or sealing of rooms at 4, Chandni Chawk Street, Calcutta, on April 11, 1990. In paragraph 8(b) of the affidavitin-reply filed in Case No. RN-279 of 1990 it is stated that it might be that at the material time when the respondents seized and searched at the office of the applicant at 4, Chandni Chawk Street, Calcutta, at that moment Shri S.K. Goel was not present, but subsequently the son of the applicant accompanied the officers to the residence at Howrah. If that be the fact, Shri S.K. Goel accompanied the officers to 28/5, Dobson Road, Howrah, from 4, Chandni Chawk Street, Calcutta, in the absence of any allegation that the officers met Shri S.K. Goel at any other place. No incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -in-reply filed in Case No. RN-279 of 1990 it is not specifically denied that the son of the applicant did not hand over the books of account and other records to the visiting officers, though search on April 11, 1990 at 4, Chandni Chawk Street, Calcutta and absence of consent of the son of the applicant in sealing of the rooms at that premises on that date are pleaded. These averments in paragraph 12 of the affidavit-in-reply are not supported by any affidavit by Shri S.K. Goel. I am, accordingly, of the opinion that there was factually no search but only inspection under section 14(2) of the Act of 1941, that Shri S.K. Goel produced the books of accounts and other documents before the visiting officers prior to seizure of these books of account and documents on April 11, 1990 and that Shri S.K. Goel was present at the time of the sealing of the rooms at 4, Chandni Chawk Street on April 11, 1990. 14.. The last contention of Mr. Chakraborty is that the searches and seizures were without jurisdiction as the conditions precedent for making the searches and seizures were not satisfied. Mr. Chakraborty has referred to the case of Mohinder Singh Gill v. Chief Election Commissioner AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter obtained the signatures of Shri S.K. Goel on that report or on the seizurereceipt or in the reports regarding sealing of the rooms at 4, Chandni Chawk Street, Calcutta, on April 11, 1990. The respondents have not improved on the cases made out by them in the affidavit-in-opposition filed by them in Cases Nos. RN-279 of 1990 and RN-341 of 1990. During hearing of these cases, the learned State Representative supplied us as well as the applicant xerox copies of the reports drawn up by the officers of the Bureau of Investigation on April 11, 1990, May 4, 1990, June 20, 1990, June 21, 1990, June 22, 1990 and June 25, 1990. No improvement of the cases made out in the affidavit-in-opposition has been made by supplying these xerox copies of these reports and hence the case reported in AIR 1978 SC 851 (Mohinder Singh Gill v. Chief Election Commissioner) can have no application in the present cases. The officials of the Bureau of Investigation were not prompted by any mistaken belief in the existence of any non-existing fact or circumstance before making the seizures in the present cases and hence the case reported in AIR 1979 SC 49 (Smt. S.R. Venkataraman v. Union of India) can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an but Shri S.K. Goel who handed over the books of account and documents to the officers of the Bureau of Investigation on April 11, 1990, before seizure of these books of account and documents under section 14(3A) of the Act of 1941 on that date in presence of Shri S.K. Goel. The cases reported in [1951] 2 STC 167 (Mad.) (Mariyala Venkateswara Rao, In re) and [1982] 50 STC 113 (Cal) (Deoralia Brothers v. State of West Bengal) have thus no application in the present cases. 15.. Mr. Gopal Chakraborty has next referred to the cases of Amba Lal v. Union of India AIR 1961 SC 264, Gian Chand v. State of Punjab AIR 1962 SC 496, Manicklal Sen v. Additional Collector of Customs AIR 1965 Cal 527, Mangala Prosad v. V.J. Manerikar AIR 1965 Cal 507 as well as Keshardeo Santhalia v. State of West Bengal [1990] 78 STC 204 (WBTT) and has contended that for seizing goods and imposing penalty under section 14A of the Act of 1941 the respondents must show that the goods were transported in violation of the provisions of section 4B of the Act of 1941. The contention is that the applicant did not transport any goods in violation of any provision of law and that as a negative fact cannot be proved, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8A of the Sea Customs Act, 1878, the onus lay upon the customs authorities to prove that the goods were smuggled goods. These decisions can have no relevance for considering the validity of the seizures of the goods on May 4, 1990 and June 25, 1990, when there is no provision for awarding punishment of confiscation or fine in the Act of 1941 alike the provision in section 167(81) or 167(8) of the Sea Customs Act, 1878, corresponding with some variations to the provisions in sections 135 and 111(d) of the Customs Act, 1962. The case of Keshardeo Santhalia v. State of West Bengal [1990] 78 STC 204 was decided by this Tribunal. It was decided in the case of Keshardeo Santhalia [1990] 78 STC 204 (WBTT) that the reasons to believe contemplated by section 14A must pre-exist before a seizure is made and that subsequent disclosures resulting from investigations conducted after the seizure cannot validate or ratify the seizure effected earlier without any materials, but based merely on suspicion or conjecture. This decision in the case of Keshardeo Santhalia [1990] 78 STC 204 (WBTT) will also be of no help to the applicant as the respondents are not trying to validate the seizures made on M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Majumdar, learned State Representative, drew our attention to the observations made by the Supreme Court at pages 430 and 431 of that case to the effect that the burden of showing that the assessees utilised the goods purchased for any other purpose, i.e., for a purpose different from that for which the goods were purchased as evidenced by the declaration forms, would be on the Revenue and that the Revenue could discharge this burden by calling upon the assessees to produce evidence to show that the goods were resold by them or that the goods were used by them as raw materials in the manufacture of goods and that the goods so manufactured were sold. It was observed by the Supreme Court in that case that these matters would be a fact exclusively within the knowledge of the assessee and that if the assessee did not produce sufficient evidence to establish these facts, it might be legitimate for the Revenue to raise an inference that the assessees did not utilise the goods for the purpose for which they were purchased, but utilised them for any other purpose. These principles laid down by the Supreme Court for deciding the applicability of section 5(2)(a)(ii) of the Act of 1941, as ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to searches shall, so far as may be, apply to searches under that section subject to one modification mentioned in section 37(2) of that Act, as Director of Enforcement or an Officer of Enforcement is not a Magistrate. In construing these provisions in section 37(2) of that Act it has been held by the Supreme Court in the case of Dr. Partap Singh v. Director of Enforcement, Foreign Exchange Regulation Act [1985] 155 ITR 166 (SC); AIR 1985 SC 989 that the methodology prescribed for carrying out the search provided in section 165, Code of Criminal Procedure, has to be generally followed. It has been held in that case that the expression, "so far as may be" has always been construed to mean that those provisions may be generally followed to the extent possible. It has further been held in that case that if a deviation from compliance with the provisions of section 165(1), Code of Criminal Procedure becomes necessary to carry out the purposes of the Foreign Exchange Regulation Act, it would be permissible except that when challenged before a court of law, justification will have to be offered for the deviation. Similarly, section 105(1) of the Customs Act, 1962, relates to authorisati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(2) of the Act of 1941. In another unreported decision of the Calcutta High Court on August 27, 1990, in appeal from Original Order No. 17 of 1987, to which our attention has been drawn by Mr. D. Majumdar, the learned State Representative, the same view has been taken on following the decision of the Supreme Court reported in [1967] 20 STC 453 (Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver). It has been held in that case that although section 14(2) of the Act of 1941 is not verbatim similar to section 41(2) of the Madras General Sales Tax Act, 1959, the power of search is implicit in subsection (2) of section 14 of the Act of 1941, as otherwise the power of inspection will be of little consequence. It has already been shown that Shri S.K. Goel produced the books of account and documents before the visiting officers prior to the seizure of the books of account and documents from 4, Chandni Chawk Street, Calcutta, on April 11, 1990. It has been held by this Tribunal in the cases of Rajeswar Sarkar v. Commercial Tax Officer and Mrs. Fortune v. Commercial Tax Officer (RN-453 of 1989 and RN-482 of 1989 decided on March 16, 1990), to which our attention has been drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riminal Procedure, will not vitiate the seizure of books of accounts and documents on April 11, 1990. The thing for which search is to be made is to be specified under section 165(1), Code of Criminal Procedure only when search warrant under section 93 of the Code of Criminal Procedure cannot be obtained in ordinary course. There is no provision under the Act of 1941 for obtaining of search warrant by Commercial Tax Officer or officers of the Bureau of Investigation before making any search or seizure under section 14 or 14A under the Act of 1941. 19.. A grievance has been made in both the cases about non-compliance of the provisions of section 100 of the Code of Criminal Procedure. In Case No. RN-279 of 1990 it has been alleged in paragraph 20 of the main application that in violation of the provisions in section 100(4), Code of Criminal Procedure signature of any independent and respectable person who inhabited in the locality was not taken in the seizure-receipt prepared on April 11, 1990. It has been alleged in that paragraph that signature of one person of a far distant place was taken as a witness in that seizure-receipt. In the affidavit-in-opposition filed in Case No. RN- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by him in accordance with the provisions of law and hence the officials of the Bureau of Investigation had reason to believe that the goods had been imported in contravention of the provisions in section 4B of the Act of 1941. On receipt of information that notified goods had been transported in contravention of section 4B of the Act of 1941, the sales tax authorities carried on search at the godown for the purpose of verifying whether the goods had been transported without permit as required. As the dealer failed to produce all relevant documents to prove that the said goods were either carried by permits or locally purchased, as claimed, the officers had reason to believe that the goods had been transported in contravention of section 4B. The belief on the part of the sales tax authorities had therefore, a reasonable nexus with an objective fact. The challenge to the seizure of the goods on May 4, 1990, is thus to fail. 21.. The copy of the report drawn up on June 20, 1990, which also bears the signature of Shri S.K. Goel, shows that the seizure of the gate pass book under section 14(3) of the Act of 1941 on June 20, 1990 was done in the presence of Shri S.K. Goel, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one year from the date of seizure of the books of account, documents and gate pass book. In these circumstances, direction is to be given for release of the seized books of account, documents and gate pass book, in case no such sanction for retention of these documents, books of account and gate pass has been made by the Commissioner of Commercial Taxes and the reasons for such retention have been communicated to the applicant. 25.. Cases Nos. RN-279 of 1990 and RN-341 of 1990 are accordingly dismissed without any order as to costs with the rider that in case there is no sanction under clause (b) of the proviso to sub-section (3A) to section 14 of the Bengal Finance (Sales Tax) Act, 1941, for retention of the books of account and documents seized on April 11, 1990 from 4, Chandni Chawk Street, Calcutta and of the gate pass book seized on June 20, 1990 from the godown at 12B, Beliaghata Road, Calcutta or in case any such sanction for retention has not been communicated to the applicant for retention of the seized books of account, documents and gate pass book for any period exceeding one year from the dates of seizure of such books of account, documents and gate pass book, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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