Search and seizure under sales tax law requires prior written belief of tax evasion; absence of recorded reasons invalidates the seizure.

Search and seizure under section 28(3) of the Karnataka Sales Tax Act can be exercised against a person claiming to be unregistered where the authorised officer has credible information of tax evasion; registration is not a precondition to that extraordinary power. However, the search is valid only if the officer first forms a reasonable belief of evasion and records the reasons in writing before commencing the search, in line with safeguards corresponding to section 165 CrPC. As the records showed no such prior written reasons or recorded belief, the seizure was held illegal, the writ petition succeeded, and the seized books and documents were directed to be returned.

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Issues: (i) whether the authorised officer could invoke the power of search and seizure under section 28(3) of the Karnataka Sales Tax Act, 1957 against a person claiming not to be a registered dealer, and (ii) whether the seizure was vitiated for compliance with the safeguards corresponding to section 165 of the Code of Criminal Procedure, 1973.

Issue (i): Whether the authorised officer could invoke the power of search and seizure under section 28(3) of the Karnataka Sales Tax Act, 1957 against a person claiming not to be a registered dealer.

Analysis: The statutory scheme was examined and it was held that registration is not a precondition for the exercise of search powers where the officer has credible information that a dealer is attempting to evade tax. The charging provisions and the provisions dealing with registration and liability for failure to register show that the Act applies to dealers whose turnover attracts the levy, whether or not they are registered. The power under section 28(3) is an extraordinary power intended to verify whether a person is in fact carrying on taxable business and attempting to evade tax.

Conclusion: The objection to jurisdiction failed and the power under section 28(3) was held to be available.

Issue (ii): Whether the seizure was vitiated for non-compliance with the safeguards corresponding to section 165 of the Code of Criminal Procedure, 1973.

Analysis: It was held that before searching premises under section 28(3), the authorised officer must form a reasonable belief that tax is being evaded and must record the reasons in writing before commencing the search. The records did not disclose any recorded reasons or prior formation of the required belief. The search and seizure therefore failed the mandatory safeguards governing such action.

Conclusion: The seizure order was illegal and liable to be quashed.

Final Conclusion: The writ petition succeeded because the seizure could not be sustained in the absence of the mandatory written-record safeguards, and the seized books and documents were directed to be returned.

Ratio Decidendi: A search and seizure under tax legislation that incorporates CrPC safeguards is valid only if the authorised officer forms a prior reasonable belief of tax evasion and records the grounds in writing before the search begins.

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