Inspection versus search under sales tax law: seizure upheld where records were inspected on information and reasons were recorded.

Section 28 of the Karnataka Sales Tax Act distinguishes inspection from search: inspection of records and premises may be undertaken on definite information without prior notice, while a search for concealed material attracts the safeguards applicable to search and seizure. On the facts accepted, the officer visited the dealer's premises on information, called for records relating to disputed stock-transfer transactions, inspected those records, recorded reasons in writing, and then seized the documents. The Court treated earlier contrary observations as fact-specific and distinguished cases involving an unlawful search. The seizure was upheld as the result of a lawful inspection rather than an illegal search.

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Issues: Whether the seizure order passed under section 28(3) of the Karnataka Sales Tax Act was made after inspection of the dealer's premises or after a search of the premises, and whether such seizure was vitiated for want of compliance with the safeguards applicable to search and seizure.

Analysis: The statutory scheme under section 28 distinguishes between a call for production of books, inspection of accounts and premises, and seizure on reasons recorded in writing when there is reason to suspect evasion of tax. A mere inspection does not require prior notice, and the element of surprise may be necessary where the officer suspects concealment or evasion. Search, in contrast, involves an exploratory probing into concealed material and attracts the procedural safeguards relating to search and seizure. On the facts accepted by the Court, the officer visited the premises on definite information, called for the relevant records relating only to the disputed stock-transfer transactions, inspected those records, recorded reasons, and then seized the documents. The earlier observations in the cited Division Bench decision were treated as confined to its facts, while the other cases relied on by the petitioner were distinguished as cases where the seizure was in truth preceded by an unlawful search.

Conclusion: The seizure was held to be the result of a lawful inspection and not an illegal search, and the impugned seizure order was upheld.

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