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TMI Blog1997 (9) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... m the petitioner firm and served a copy of the seizure list to the petitioner. The petitioner thereafter was issued with a notice No. BIEO/ST/190 dated February 20, 1995 to produce the books of account in respect of the seized documents as specified in the seizure list for verification along with seized documents on February 28, 1995. By letter dated February 28, 1995 the petitioner sought for time to produce books of accounts and thereafter the petitioner was again served with a notice dated April 1, 1995 for production of books of accounts in support of the seized documents at 11 AM on April 24, 1995. Instead of producing the records as per application on February 28, 1995 and April 24, 1995 the petitioner moved this Court by way of writ petition assailing the legality of the seizure of books of account. 3.. The respondent contested the writ petition and submitted its affidavit, in its affidavit the respondent stated that the books of account were seized by the Inspector of Taxes by virtue of power delegated by the Commissioner, Taxes under section 3(3) of the Act read with rule 8 of the Rules, framed under the Act. Inspection was conducted by the Superintendent of Taxes and In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n set up by the Government of Assam with the conglomeration of the officers of various department, like supply, transport, excise, taxation, forest, weights and measures, even though they are functioning under the Bureau, they are to submit their reports of action to the Commissioner of Taxes under whose delegated power they are functioning and it is the Commissioner of Taxes, who entrusts the officers appointed to assist him in the respective territorial jurisdiction to dispose of such report in accordance with provisions of law. The officers deputed to the bureau are the part and parcel of the taxation department. 4.. Dr. A.K. Saraf, the learned counsel appearing on behalf of the petitioner put forward the following submissions before this Court: 1.. The seizure of books of accounts without fulfilment of the mandatory requirement of recording of the reasons of suspicion that the dealer is to evade payment of any tax is illegal, without jurisdiction and not tenable in law. 2.. That the respondents by issuing a notice under section 44(1) of the Assam General Sales Tax Act, 1993 directing the petitioner to produce books of account, conducted search in the business premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Taxes; Reported in [1997] 106 STC 426 (Gauhati). (iv) Assistant Commissioner of Taxes; (v) Senior Superintendent of Taxes; (vi) Superintendent of Taxes; (vii) Inspector of Taxes; (viii) Any other persons appointed as such by the State Government. 8.. Subject to the provisions of the Act and the Rules made thereunder, the Commissioner may, by notification in the official gazette, delegate the powers to be exercised by above classes of officers and shall, by like notification, specify the area in which powers are to be exercised by each of the above classes of officers. Provided that the Commissioner shall not delegate his powers under sub-section (1) of section 36 to any officer below the rank of Deputy Commissioner of Taxes. .......................... 44.. Production, inspection and seizure of accounts, documents and goods and search of premises: (1) Subject to such rules as may be made by the State Government under this Act, any authority, appointed under sub-section (1) of section 3, may either before or after assessment, require any dealer to produce before it or him any accounts, registers or documents or to furnish any information relating to the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any place of the dealer, or of a dalal or of an owner of a warehouse, or of a clearing, booking or forwarding agent, or of a person transporting goods or vessels or goods carrier and seize any goods which are found therein but not accounted for by the dealer or the dalal, or the owner of the warehouse, or the clearing, booking or forwarding agent, or the person transporting goods in his books, accounts, registers and other documents: Provided that a list of all the goods seized under this sub-section shall be prepared by such officers and be signed by the officer, the dealer or the person-in-charge of goods or the person-in-charge of the premises, and not less than two witnesses. (b) The authority referred to in clause (a) shall, in a case where the dealer or the person-in-charge of goods as mentioned in clause (a) fails to produce any evidence or satisfy the said authority regarding the proper accounting of goods, impose a penalty, after giving an opportunity of being heard in the prescribed manner to the dealer or such person which shall be equal to three times the amount of tax calculated on the value of such goods and the goods shall be released as soon as the penalty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng search and seizure or for safe custody of goods under the section and such public servant or police officer shall render necessary assistance in the matter. Section 44(1) empowers any authority appointed under sub-section (1) of section 3 to produce before him any accounts, documents, etc., or furnish any information specified therein. This can be done even after the completion of the assessment. 8.. Chapter IX of the Act deals with the provision of accounts, inspections, search and seizure, etc. Section 40 of the Act enjoins the dealer to keep a true and complete account in respect of goods produced, raised, manufactured, processed, bought, sold or delivered or transferred by him. Section 41 of the Act entrusted with the duty to the dealer to preserve book of accounts, documents referred to in sub-section (1) of section 40 and all declarations and other documents laid down under sub-section (2) of section 10 shall be preserved for a period of not less than eight years from the end of the year to which they relate. 9.. From the brief review of the provisions contained in section 44 of the Act it is seen that any authority, appointed under section 3(1) of the Act may either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son after recording reason in writing. Whereas sub-section (2) of section 44 conferred on the officer concerned the power of search and sub-section (3) of the said section provided the power to seize the accounts which are found on such search. Sub-section (3) is therefore complementary to sub-section (2) of the Act. Under sub-section (3), therefore, the authority appointed under sub-section (1) of section 3 is invested with the power to seize such accounts on his reason to suspect that the dealer is to evade any payment of tax, such authority may for reasons to be recorded in writing seize such accounts, registers or documents of the dealer. The officer assumes jurisdiction on the ground of his suspicion for such seizure of accounts a dealer is to evade the payment of tax. Suspect means to have slight or even vague idea concerning necessarily involving knowledge or belief or likelihood. The officer gets his jurisdiction on forming of suspicion. Sub-section (2) of section 44 empowers the authorities to inspect all accounts, registers and documents relating to the financial transaction of a dealer, the profit derived from such transaction and all goods kept in any place of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to have been made after a search. Sub-section (3) gives power for seizure of the accounts and documents. The legal position is very clear that before seizure under subsection (3) of section 44 is made, the officer concerned must have reasons to suspect that the dealer is attempting to evade the payment of any tax or any clearing or forwarding agent or a person transporting the goods on the owner of a warehouse or a godown is keeping or has kept his accounts in such manner as is likely to cause evasion of tax payable under the Act. The authority concerned has to record the reasons for suspicion in the mind of the officer concerned about the evasion of taxes and secondly, if he wants to seize any accounts, register or documents, he must record the reason in writing therefor and then only he may seize such accounts register of documents: Commissioner of Commercial Taxes v. Ram Kishan Shri Kishan Jhaver [1968] 20 STC 453 (SC); AIR 1968 SC 59 and Merchantile Stores Agency Company Pvt. Ltd., Balimara Tea Company Pvt. Ltd. v. A. Rahman, Inspector of Taxes (Civil Rule Nos. 878 and 879 of 1972, Gauhati High Court, dated April 1, 1975). However, the seized documents, accounts, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being evaded or there was attempt to avoid the taxes and accordingly documents were seized and the same was recorded in the presence of the petitioner who put his signature at the pages containing such reasons. 13.. Conferment of power in express terms naturally suggests for making the power effective and operative. The courts while constructing a statute is to translate the legislative edict. "The office of the judge is, to make such construction as will suppress the mischief, and advance the remedy, and to suppress all evasions for the continuance of the mischief" (Magdalen College Case (1616) 11 Rep. 66b. Maxwell on the Interpretation of Statutes (Twelvth Edition) restated in the following passages: "To carry out effectually the object of a statute, it must be so construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined: Quando aliquid, prohibetur, prohibetur et omne per quod devenitur ad illud... This manner of construction has two aspects. One is that the courts, mindful of mischief rule, will not be astute to narrow the language of a statute so as to allow persons within its purview to escape ..... 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