Recorded satisfaction for tax-evasion seizure and communicated retention sanction are mandatory; seizure and continued detention were invalid.

Seizure of books and records under section 14(3) was held invalid because the statutory condition precedent was not met: the Commissioner had not recorded a bona fide satisfaction, based on objective material, that the dealer was attempting to evade tax, and inspectors' own satisfaction could not replace it without proved delegation. The continued retention of the seized books beyond the prescribed period was also held unlawful because the sanction extending retention was not shown to have been properly communicated to the dealer. The impugned seizure and detention could not be sustained, and relief was granted to the assessee.

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Issues: (i) whether seizure of books and records under section 14(3) of the Bengal Finance (Sales Tax) Act, 1941 was valid in the absence of the Commissioner's recorded satisfaction that the dealer was attempting to evade tax; (ii) whether retention of the seized books beyond the prescribed period was lawful without proper communication of the sanction extending retention.

Issue (i): whether seizure of books and records under section 14(3) of the Bengal Finance (Sales Tax) Act, 1941 was valid in the absence of the Commissioner's recorded satisfaction that the dealer was attempting to evade tax.

Analysis: The statutory power of seizure was treated as conditional upon the formation and recording of a bona fide belief that the dealer was attempting to evade payment of tax. Mere recital of the language of the section or suspicion unsupported by proper material was held insufficient. The Court also held that the requisite satisfaction was personal to the Commissioner and could not be treated as validly substituted by the Inspectors' own satisfaction in the absence of proof of due delegation. On the materials produced, no recorded satisfaction by the Commissioner before seizure was shown.

Conclusion: The seizure under section 14(3) was invalid and unauthorised, and the issue was decided in favour of the assessee.

Issue (ii): whether retention of the seized books beyond the prescribed period was lawful without proper communication of the sanction extending retention.

Analysis: The Court applied the statutory scheme governing retention of seized records and held that extension of the period of retention had to be supported by lawful sanction and communicated to the aggrieved dealer. In the absence of reliable proof that the sanction extending retention had been duly communicated, continued detention of the books was held to be irregular and without authority of law.

Conclusion: The retention of the seized books beyond the statutory period was unlawful, and the issue was decided in favour of the assessee.

Final Conclusion: The impugned seizure and continued retention of the books and documents could not be sustained, and the writ succeeded.

Ratio Decidendi: A seizure under section 14(3) is valid only when the statutory authority has recorded a bona fide satisfaction, based on objective material, that tax evasion is being attempted, and retention of seized records beyond the prescribed period is ineffective unless the sanction for extension is lawfully communicated.

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