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TMI Blog1993 (9) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... als had to be suspended since 1990 under intimation to respondent No. 1. Assessments had been completed up to March 31, 1988. Though the company did not do anything in contravention of law, respondent No. 2 and others (being Commercial Tax Inspectors) visited the additional place of business and seized books of account, bills, documents and records from 1-30 p.m. to 8 p.m. on August 12, 1992. A purported seizure receipt was issued. The seizure was invalid and illegal, as it was allegedly arbitrary, and as there was no reason to suspect that applicant-company was attempting to evade payment of tax. The alleged search and seizure were not attended by any independent witness. On August 14, 1992, it was represented on behalf of the company to respondent No. 3 that the seizure was illegal and that the business had been suspended from 1990 and he was requested to release the seized books, documents, etc. But respondent No. 3 orally demanded that a sum of Rs. 50,000 should be deposited by August 17, 1992. When asked for, no written demand to that effect was issued. Nor were the books and documents released. 3.. In RN-332 of 1992 the case of the applicant Pawan Kumar Sureka (proprietor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was made to the authorities on August 14, 1992, but the seized things were not released. On the other hand, respondent No. 3 orally demanded that applicant should deposit rupees one lakh. 5.. In RN-334 of 1992, the case of Sureka Steels Ltd. is substantially the same as above. Its factory is at North Bantra, Howrah, with an additional place of business at 23A, Netaji Subhas Road, Calcutta-1. The company keeps its books of account at its registered office at the factory. This company also suspended its business of the same nature in 1990 under intimation to respondent No. 1. It was assessed up to September 30, 1987. On August 12, 1992, seizure was conducted at the additional place of business and at the residence at Liluah, Howrah. Allegedly, the seizure was arbitrary and illegal for the same reasons, as in other cases. On August 14, 1992, a representation was made to the authorities against the seizure and for release of seized books, etc., but nothing was released. Allegedly, applicant was orally directed by respondent No. 3 to deposit rupees one lakh. 6.. All these cases have been resisted by respondents who used affidavitsin-opposition. The case of respondents is now sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the further allegation that a sum of rupees one lakh was demanded orally as tax are all denied. It is claimed that the seizure was valid and there were good reasons for making the seizure. In RN-334, the case of the respondents is similar to that in RN-333. It is stated that on August 12, 1992, during the impugned visit to the place of business, when asked to produce, G.S. Sureka, one of the directors, failed to produce regular books of account; but produced certain files containing bills, from which it transpired that applicant had effected huge amount of sales. As G.S. Sureka failed to explain why those sales did not appear in the returns, the records were seized. Allegations of illegality of seizure and the allegation of orally asking to pay rupees one lakh as tax are denied. Validity of the seizure is defended. In all the four cases, all material allegations by respective applicants are denied. 8.. Mr. M.L. Bhattacharjee, learned advocate for the applicants, contended that all the seizures were invalid and illegal for three reasons. His first contention is that before a seizure, the authority making the seizure should have reason to suspect that the dealer is attempting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of sections 100 and 165 of the Criminal Procedure Code, 1973. The decision of this Tribunal in the case of Shree Gopal Bahety involved compliance of section 100(4) of the Code of Criminal Procedure, 1973 and also existence of reason to suspect that the dealer is attempting to evade payment of tax. 10.. The learned State Representatives did not dispute the legal proposition that the reason to suspect, as laid down in section 14(3) of the 1941 Act, must exist prior to seizure and the reasons must also be recorded in writing prior to seizure. The language and intent of section 14(3) are unambiguous to the effect that before a seizure takes place, the competent authority making the seizure should have a reason to suspect that any dealer is attempting to evade payment of any tax under the 1941 Act and he may proceed to effect the seizure after recording the reasons in writing. One of the contentions of Mr. M.L. Bhattacharjee is that recordings of reasons were done after the seizures had taken place. He drew our attention to the recorded reasons in the respective cases. In case No. 331 of 1992 such recording is called report . The last two paragraphs of this recording are reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seizure receipts had been prepared and made over to the persons concerned prior to the point of time when the reasons were recorded or the reports were written up. In other words, we are unable to uphold the contention of the learned State Representatives that these reasons were recorded prior to the commencement of the seizures. The recordings are the only evidence as to whether or not the required reason to suspect was entertained. Failure to record the reasons prior to effecting the seizures vitiates the actions. The seizures were, therefore, in contravention of the provisions of section 14(3) of the 1941 Act. Since, on this very ground the seizures must be held to be invalid, we do not propose to enter into the two other contentions of Mr. Bhattacharjee that there was non-compliance of section 100 of Criminal Procedure Code for absence of any witness and that the question of retention of seized records and books of account does not arise in view of deemed assessments under section 11E(1) of the 1941 Act. It may be noted that the learned State Representatives contended that non-compliance of section 100 of the Criminal Procedure Code did not affect the validity of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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