9911796707
TMI Blog2002 (8) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of ERW black pipes is purchased on tax-free basis by the petitioner on production of declaration forms. In 1997 petitioner established a newly set up industrial unit on National Highway, Domjur and got registration certificate from the Director of Cottage and Small-Scale Industries. The petitioner also applied for eligibility certificate under section 39 of the Act of 1994 before the Assistant Commissioner, Special Cell, who after visit and inspection of the plant, on being satisfied issued eligibility certificate under section 39 of the Act of 1994 for five years commencing from September 16, 1997. The petitioner duly submits return. Assessment has been completed up to March 31, 1998. Petitioner duly maintains accounts and documents as required and never flouted any provision of law in this respect. But on March 23, 2000 some officers of Bureau of Investigation with respondent No. 2 who is also an Inspector of that Bureau entered into the business place of the petitioner at Sarat Bose Road and started taking out files, books of account, etc., and seized the same, issued seizure receipt alleging that the petitioner is evading payment of tax and that those are required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons to suspect evasion of tax prior to seizure, there is no illegality or irregularity over the same as stated. 3.. The petitioner used affidavit-in-reply where it is stated that no instance of alleged purchase made from unregistered dealer has been offered. There is actually no purchase from unregistered dealer as stated. The petitioner never misused the declaration form. Had there been ever any such misuse, that could have invited penalty proceeding as per law. Moreover, no seizure is warranted for misuse of declaration form. The limit of investment in plant and machinery as provided in rule 98 of the West Bengal Sales Tax Rules, 1995 has never been exceeded so as to disqualify the petitioner from the benefit under section 39 of the Act of 1994. Even if it did, as alleged, that excess investment never gives the required jurisdiction to respondent No. 2 to seize the books of account so long as the eligibility certificate remains valid and it so remains valid even to this date. The petitioner duly paid tax on the sale of scrap that was produced. So the allegation of non-payment of tax on scrap is baseless. So long eligibility certificate remains valid and so long there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct approves this action. It is the duty of the dealer under section 65(1)(b) to furnish information to the authorised revenue officer appointed under sub-section (1) of section 3 of the Act of 1994 who has every right to enter such place of business for inspection of documents, goods, etc. The competency of the concerned officer, namely, respondent No. 2 Inspector, Commercial Tax, Bureau of Investigation, to conduct such inspection has not been called into question in this case. 6.. It is next contended by Sri S.K. Chakraborty learned Advocate for the petitioner, that seizure in this case is tainted with illegality for not following the procedural aspect of seizure, namely, recording of the reasons for suspicion prior to the seizure that the petitioner evaded or was attempting to evade payment of any tax. Absence of reasons concerning evasion or attempt to evade payment of tax makes subsequent seizure invalid. But learned State Representative submits that the seizure has been made following due procedure and he refers to the report prior to the seizure which is made an annexure to the application. Perused the said report of respondent No. 2. The report is dated March 23, 2000 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged suspicion for upholding seizure. The reasons are to be scanned to decide whether those are bona fide or nothing but colourable exercise of power. Learned advocate then takes us through the reasons adduced in the report and deals with the given reasons to justify his submission that none of the reasons has any nexus with formation of reasonable suspicion concerning evasion of tax or any attempt made therefor and that as such assumption of jurisdiction to seize the books of account and other documents is not sustainable. To emphasise his above point, Sri Chakraborty relies upon a judgment of division Bench of the Calcutta High Court reported in [1977] 39 STC 333 (State of West Bengal v. Oriental Rubber Works). 8.. The bone of contention of Sri S.K. Chakraborty is that the eligibility certificate having not been cancelled, even if the expenses on plant and machinery at the initial stage exceeded the statutory limit as alleged, though the same is not admitted, seizure cannot be effected on that ground. There being specific and appropriate provisions like proceeding for cancellation of eligibility certificate in the statute for dealing with such a case, assumption of jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndation for the reasons given but also a notice was served on the dealer to produce all books of account of his business since its inception. Here it is a case of only seizure of some books of account and some documents upon due inspection of some documents by authorised officer upon production of documents by petitioner s man as per seizure list after drawing pre-seizure report bearing signature of petitioner s admitted employer and containing factual reasons as the basis for the required suspicion. We notice here the wide discrepancies in the facts and figures that were found in the petitioner s declaration and application for obtaining eligibility certificate and the entries in the records maintained by the petitioner and the auditor s report have been mentioned in the report of respondent No. 2. Various other discrepancies as mentioned in the pre-seizure report particularly in the purchase register, sale register, etc., as produced by the petitioner s representative also prompted respondent No. 2, to suspect evasion of tax having been made by the petitioner. The instant case is not a case of search. It is confined to inspection of documents as per rules as produced. "Suspicion" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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