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TMI Blog2004 (3) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... ection report (exhibit P6). Subsequently the second respondent issued summons dated August 6, 2003 to the petitioner for production of accounts relating to the business. The petitioner then sent a letter dated August 12, 2003 stating that it would appear that the proposed enquiry related to the shop inspection conducted on May 13, 2003, that copy of the inspection report was not tendered to them and that for production of accounts and documents in relation to the shop inspection a reference to the SIR is essential. The petitioner requested for issuance of certified photocopy of the SIR and connected documents. Accordingly the petitioner was served with a copy of the SIR (exhibit P6) and this was acknowledged by the tax consultant of the petitioner on August 23, 2003. The petitioner thereafter has filed this writ petition on December 3, 2003 seeking to quash the said SIR (exhibit P6). It is the case of the petitioner that the petitioner commenced business in building No.10/304(1), College Road, Palakkad, on April 9, 2003, that it applied for CST and KGST registration on April 7, 2003, that the registering authority conducted inspection of the shop room and verified all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orisation. It is also stated that at 12.15 p.m. the second respondent issued notice to the person-in-charge of the shop to produce the books of account in respect of the business, that he had produced the cash book and sale bills book but the crucial records, viz., the purchase bills were not produced and hence one more notice under section 28(1) was issued to the person-in-charge at 3.20 p.m. requiring production of other books of accounts such as purchase bill, stock inventory, sales bills 1 to 100, etc. and that though the notices were acknowledged by Sheik Dawood, the person-in-charge of the shop he was not responding. It is stated that the petitioner possessed goods worth nearly Rs. 20 lakhs whereas his accounts disclosed purchases only to the tune of below Rs. 6 lakhs. Other matters are also stated. The allegation that Sri Suresh Babu is responsible for the inspection was denied. It is also stated that the inspection was conducted strictly in accordance with law. Sri B.S. Krishnan, learned Senior Counsel, for the petitioner maintained the stand taken in the writ petition and submitted that there is nothing in the counter-affidavit filed by the respondent to connect the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that under section 28(2) of the KGST Act an inspection can be conducted at any point of time and that in the instant case it is only by virtue of the said provisions the second respondent has conducted inspection on May 13, 2003. Section 28 of the KGST Act deals with power to order production of accounts and powers of entry, inspection, etc. Under sub-section (2) any officer, not below the rank of an assessing authority may, at any reasonable time enter any place of business or any vessel or vehicle of any dealer and inspect any accounts, registers, records or other documents relating to his business and the goods in his possession. Under sub-section (3) if any officer not below the rank of an assessing authority has reason to believe that a dealer is trying to evade any tax under this Act he may, for reasons to be recorded, enter and search the place of business of the dealer. Under sub-section (4) all searches under this section shall, so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure, 1973. Under sub-section (5) the officer making the inspections or search may seize such accounts, registers, records or other documents as he consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that the signatures of certain persons (Vineeth Kumar, salesman, Anilkumar, Satheesh and Rathish) other than the inspectors are also seen in the inventories. It is not known as to whether the persons Anilkumar, Satheesh and Rathish are respectable witnesses contemplated under rule 34(12) of the Rules. In these circumstances, it would not be possible for this court in these proceedings to say that the inspection was not conducted in accordance with law. It is now settled position that even though the materials gathered in illegal search can be relied on for making an assessment or in another proceedings the Supreme Court in Pooran Mal v. Director of Inspection (Investigation) Income-tax, New Delhi [1974] 93 ITR 505 has held that in India, as in England, where the test of admissibility of evidence lies in relevancy, unless there is an express or necessarily implied prohibition in the Constitution or other law, evidence obtained as a result of illegal search or seizure is not liable to be shut out. It was held that even though a search and seizure may be in contravention of section 132 of the Income-tax Act, 1961, still the material obtained thereby is liable to be used subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in restraint of such use can be granted. Following the decision of the Supreme Court a division Bench of this court in Deputy Commissioner of Sales Tax (Law) v. C. Prasad [1994] 92 STC 361 rejected a similar contention. In that case the business premises of the respondent-dealer were inspected by the Intelligence Officer, at a time when the dealer was not present. Several discrepancies in stocks were found. A detailed inspection report was drawn up, but the dealer's representative who was present refused to sign the report or acknowledge receipt of a copy of the report. The Intelligence Officer sent a notice to the dealer to produce the accounts. The dealer did not respond. The files were handed over to the Sales Tax Officer, who, after issuing a pre-assessment notice referring to the inspection report and the discrepancies noticed, found that there was large scale suppression, rejected the dealer's accounts and made a best judgment assessment. Though the Appellate Assistant Commissioner affirmed the said assessment, on further appeal the Tribunal held in favour of the dealer, directing the assessing authority to accept the accounts of the dealer on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision the petitioner had relied on the decision of another division Bench of this court in Deputy Commissioner, Sales Tax (Law) v. P. C. Joseph and Brothers [1994] 94 STC 296. In that case the question was as to whether the Sales Tax Appellate Tribunal was justified in holding that the information gathered during the shop inspection conducted on June 4, 1973, cannot be relied upon by the assessing authority on the ground that assessee had not endorsed the shop inspection report. The division Bench in that context observed that it is the common case of the parties that neither a statement of facts nor a list containing the particulars of the details collected during inspection had been given to the assessee. It is also not the case of the Revenue that the officer had prepared a list of all such goods which were not accounted for and found in the business premises of the assessee and a copy given to the assessee in terms of clause (12) of rule 34 of the Kerala General Sales Tax Rules . The Division Bench further observed thus: It is in this background the issues arising for consideration require to be considered. We do agree with the argument of the learned counsel for the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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