9911796707
TMI Blog1997 (9) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. It is registered as a dealer under the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act"). Earlier the applicant was registered under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") and the West Bengal Sales Tax Act, 1954 (in short, "the 1954 Act"). The applicant regularly files returns in strict compliance with the provisions of the 1994 Act. 4.. On March 1, 1996 some persons alleged to be attached to the Central Section of the Commercial Tax Directorate entered into the business place of the applicant. They started taking out the files, books of accounts and documents from the racks and almirahs of the applicant. Thereafter, the respondent No. 1 directed Shri P.K. Jhunjhunwala, one of the managers of the applicant, to give the residential address of Shri Krishna Kumar Saraogi, another manager of the applicant. Thereafter, they went with the books of accounts and documents of the applicant to the residence of Shri Saraogi who was not in his home at that time. The said persons also directed Shri Jhunjhunwala to accompany them to the residence of Shri Krishna Kumar Saraogi. In the absence of Shri Saraogi they met the female members of the family of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hunjhunwala requested respondent No. 1 to allow him to carry the books of account found at 165, Mahatma Gandhi Road, Calcutta-7 to 155B, Rabindra Sarani, Calcutta-7. He was allowed to do so and he carried the books of account to 155B, Rabindra Sarani, Calcutta-7. At Rabindra Sarani Shri Jhunjhunwala unlocked the place of business of the applicant-firm and produced books of accounts relating to the business of the applicant-firm kept at that place. After this, the books of accounts unearthed at Mahatma Gandhi Road and the books of accounts produced at Rabindra Sarani were examined together and explanations were sought from Shri Jhunjhunwala. He failed to explain entries in the books of accounts and the discrepancies found therein. This was duly recorded in the seizure report prepared before effecting the seizure. The seizure was effected because the respondent No. 1 came to form the belief that the applicant-firm was attempting to evade payment of tax. It was after formation of belief regarding attempted evasion of tax by the applicantfirm and after recording such reasons in writing that the seizure was effected in presence of the witness, viz., Shri L.K. Agarwal whose signature was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Although reference has been made to some sales no specific discrepancy has been referred to in the report and from the facts recorded there is no basis for deciding that no sales tax was paid on the sales. 9.. Mr. Bhattacharya also argued that the report was self-contradictory. If specific information was available that books of accounts were being kept elsewhere then there was no purpose in visiting the regular place of business. A mere bald statement that there was some information is not good enough as the nature of the source, dependability of the same, etc., should be disclosed at least to the court. 10.. Mr. Bhattacharya further argued that the alleged recorded reasons were not recorded prior to the seizure as would be seen from the last sentence of the same. In the last sentence the officer has recorded that "seizure receipt is being prepared by Shri Manotosh Chatterjee, I.C.T./C.S.". From this, Mr. Bhattacharya argued, it would be clear that when the reason was being recorded the seizure has already taken place and the receipt only was in the process of preparation. 11.. Mr. K.K. Saha, learned advocate for the respondents referred to section 62(2) of the West Bengal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STC 1 (SC). It has been held there that possession for the purpose of inspection is not seizure and also that seizure takes place only after the account books are taken outside the possession of the assessee. From this it would be clear, Mr. Saha argued, that the allegation that the seizure took place before the recording of reason is unwarranted. 12.. Mr. Saha further submits that the reasons recorded indicate categorically that the officers had reason to suspect that the dealer in question was attempting to evade payment of sales tax. This conclusion cannot be held to be perverse because the reasons why such suspicion arose has been indicated in detail in the record itself. In the recorded reasons it is stated that when the respondents paid a surprise visit to the dealer's place of business for inspection he found the said place under lock and key. There was, Mr. Saha submitted, no impropriety in a surprise visit and referred to rule 206(2) of the West Bengal Sales Tax Rules, 1995 under which such surprise visits were permissible. He also referred to the decision in the case of Star Iron Works (P.) Ltd. v. Commissioner of Commercial Taxes, West Bengal [1984] 56 STC 27 (Cal) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew the court should not generally look into sufficiency of reasons for taking action by a statutory authority, unless it appears that action was taken on the basis of no ground or on a ground on which no prudent person would take action. It would be clear from the records that the officer concerned came to the conclusion that there was reason to suspect evasion of tax after he discovered definite discrepancies in the books of accounts produced before him. If various challans showing delivery of goods to different parties are not corroborated by reference to the connected books of accounts or when transactions with another company recorded in the register, prima facie a sale register, could not be reconciled with the books of accounts and documents of the dealer, it could not be stated that this could not have been the reason for an ordinary prudent person to come to the finding that there was reason to suspect evasion of taxes. Again the officer concerned concluded from balance sheets of two successive years that the total sale of taxable goods must have been more or less of the order of Rs. 10 lakhs but no sales tax was paid for this period. In this connection, Mr. Saha submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aha also submitted that absence of the address of the witness is of no consequence as the seizure witness was an employee of the company who could not be expected to be hostile to the latter. Since he was an employee of the company, it should not be presumed that the applicants were unaware of the signature of this witness on the seizure receipt although his signature did not appear on the receipt given to them. Mr. Saha submitted that the original seizure receipt where the signature of the witness is recorded is available in the court and could be perused if the court so wanted. 15.. The contention of the applicant that the reasons recorded were only vague reasons and no specific discrepancies were recorded cannot be considered to be a reasonable one. From the recorded reasons it appears that the suspicion of the officer regarding evasion of tax on the part of the dealer cannot be said to be a perverse one based on no ground whatsoever or on the basis of totally impermissible grounds. In that view of the matter, we are not in a position to hold that the reasons to suspect evasion of tax are arbitrary or untenable. We do not agree with the further contention that the language of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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