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TMI Blog1996 (7) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... edings he did not comply with the relevant provisions of section 22 of the ST Act and the rules made thereunder. At the time of inspection/search it was found on physical verification of the stock of the taxable goods that goods worth Rs. 65,998 were found short. Non-petitioner No. 3 prepared a list of these goods, which were exigible to tax at 10 per cent and recorded the statement of Shri Lalit Kumar Saraf, a partner of the petitioner-firm on the spot the same day. All these proceedings were taken in the absence of any witness or witnesses who were required to be present in view of the provisions contained in rule 58 of the Rajasthan Sales Tax Rules, 1955 (hereinafter referred to as "the Rules"). The statement of Shri Saraf was recorded in an atmosphere of awe, terror, fear and tension caused by the surprise visit of the raiding party. Non-petitioner No. 3, on the same day, i.e., January 20, 1988, issued a notice to the petitioner-firm calling upon it to show cause as to why a penalty under section 16(1)(i) of the RST Act read with rule 58 of the Rules should not be imposed upon it. The date on which the petitioner-firm was to show cause was fixed for February 5, 1988. Thereupon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 21,119.36 was deposited by the petitioner-firm with the department. This amount of money was received by non-petitioner No. 3 not on the spot but in his office. 4.. No rejoinder has been filed on behalf of the petitioner-firm. 5.. We have heard the arguments and examined the record as also considered the relevant provisions of law bearing upon it. 6.. The learned counsel for the petitioner-firm, Shri Dinesh Mehta, has advanced before us a number of contentions in support of the case of the petitionerfirm. The first contention is that the search proceedings were conducted by nonpetitioner No. 3 in violation of the provisions contained in section 22 of the RST Act and rule 58 of the Rules. To be specific, he contends that no witness was present on the spot. No list of the goods was prepared. Non-petitioner No. 3 did not record the reasons for his belief that the petitioner-firm was evading tax. His second contention is that no notice was ever given to the petitioner-firm to the effect that it had committed an offence for which the prosecution was likely to be launched against it. His third contention is that the amount recovered from the petitioner-firm is very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business premises of the petitioner-firm and inspected the books of account as also the goods stocked in the business premises and it transpired that the goods worth Rs. 65,998 were not there. A list of the goods which were found short was prepared. A notice to show cause was issued to the petitioner-firm. No seizure did take place with regard to either of the books of account or of the goods themselves. The words "inspection" and "examination" on one hand and the words "search" and "seizure" on the other have separate meanings and connote different things. In the case of the former no detailed examination of anything is to take place whereas in the case of the latter the official has to make an exploratory exercise to ferret out something which is hidden or concealed. Thus they drive at targets different from each other. When this test is applied to the present case it is found that it was the case of mere inspection or examination and not a case of search and/or seizure. 8.. It is against this background of factual position that it is apposite to consider the provisions of section 22 of the RST Act to find out as to whether there was any violation of these provisions. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese provisions discussed in the preceding paragraph shows that where a mere inspection or examination of the business premises of a dealer is made or conducted no reasons need to be recorded in writing prior to such inspection or examination. It is only in a case where search is made or seizure either of books of account or of goods is effected then the reasons are to be recorded. 10.. In order to deal with specific objections with regard to the absence of any witness and the omission to prepare the list of goods, it is apposite to reproduce rule 58 of the Rules as hereunder: "58. Procedure for searches under section 22.-(1) The assessing authority or any person authorised under sub-section (1) of section 22, may carry out search or seizure under section 22 with such assistance as he may consider necessary. (2) The following procedure shall be observed in regard to all searches under sub-sections (4), (5) and (6) of section 22, namely: (a) Before making a search, such authority or person shall call upon two or more (witnesses) to attend and witness the search and may issue an order in writing to them or any of them to do so; (b) The searches shall be made in the presenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of this Act, or acts in contravention of any provisions of the Act or the rules, not otherwise provided for in this Act or in the rules; the assessing authority or any other officer not below the rank of Assistant Commercial Taxes Officer as authorised by the Commissioner may direct that such person shall pay by way of penalty- (i) to (v)....... (vi) in cases referred to in clause (i), in addition to tax payable on such transactions of sale or purchase a sum not exceeding double the amount of such tax; (2)................. (3) If any person- (a) to (f)....... (g) fraudulently evades, or wilfully avoids, the payment of tax or conceals his liability to tax; or (h) to (m)........., he shall, on conviction by a Judicial Magistrate, be punishable with simple imprisonment for a term which may extend to two years and with fine not exceeding rupees one thousand and for the offences under clause (g) or (k) or (m), with a minimum sentence of simple imprisonment of one month; and (4) and (5).......... (6) Any assessment or reassessment, and any further proceedings relating thereto shall be without prejudice to any penalty or prosecution under this sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day. The department acted with speed but all this was done in hot haste, thereby inducing in the mind of Shri Saraf a reasonable apprehension that justice was not done to him. This contention does not hold water. All the proceedings taken on a single day cannot be adjudged as bad or illegal merely because of the fact that they were taken on a single day. There is nothing on the record to show that any illegality was committed. In Kaki Butchi Raju Son v. State of Andhra Pradesh [1995] 96 STC 634 (AP), all the proceedings were taken and completed on a single day, i.e., December 31, 1991. The suppression of the turnover of Rs. 64,160 was detected in the course of inspection on December 31, 1991. On the request of the dealer the order of composition was held legal. On page 636 of the Report it was observed as hereunder: "Having offered to compound the offence and when the offer was accepted, it is not open to the petitioner to challenge the order passed by the assessing authority. The plea in the affidavit filed in support of the writ petition that the petitioner was forced to admit the lapses alleged is clearly an afterthought. The writ petition, therefore, fails and, accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... composition of the offence before the Deputy Commissioner (Administration), Anti-Evasion, Jodhpur. If this affidavit had not been filed the learned counsel for the petitioner-firm would have raised the objection that the allegations made in the writ petition stand unrebutted. Apart from this such allegations are easy to make but difficult to prove. There is nothing on the record to prove this allegation which cannot but be dismissed as a bald statement not deserving of any notice. 19. As regards the last contention with regard to this case being covered by the judgment of this Tribunal dated February 14, 1996 referred to above, that judgment is of no help to the case of the petitioner-firm. That case wherein the judgment was given is to be distinguished in facts as also in law from the case in hand. In the first place, that case concerned search and seizure of the goods. As many as 29 cartons were seized. No such contingency has arisen in the present case. In the second place, there was non-compliance with rule 58 of the Rules whereas in the present case the question of such non-compliance does not arise. Lastly, in that case the affidavit filed was not based on the personal kn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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