Search and seizure under sales tax law requires pre-existing reasonable grounds and strict criminal procedure safeguards before documents can be retained.

Search and seizure under section 13(3) of the U.P. Sales Tax Act were valid only if the authorised officer had pre-existing reasonable grounds to believe that tax was being evaded and that relevant material would be found at the premises; the legality had to be judged on contemporaneous material, and none was produced, so the action was unlawful. Section 13(7) also required compliance with the safeguards of sections 100 and 165 CrPC, but the record did not show that the mandatory procedure had been followed, so the search and seizure failed on that ground as well. The seized account books, registers and documents were therefore ordered to be returned after photocopies were taken for the revenue authorities.

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Issues: (i) Whether the inspection, search and seizure under section 13(3) of the U.P. Sales Tax Act, 1948 were supported by reasonable grounds for believing that the dealers were evading tax; (ii) Whether the safeguards of sections 100 and 165 of the Code of Criminal Procedure, 1973 were complied with under section 13(7) of the U.P. Sales Tax Act, 1948; (iii) Whether the seized account books, registers and documents were liable to be returned to the petitioners.

Issue (i): Whether the inspection, search and seizure under section 13(3) of the U.P. Sales Tax Act, 1948 were supported by reasonable grounds for believing that the dealers were evading tax.

Analysis: The power to inspect, search and seize could be exercised only when the authorised officer had reasonable grounds, existing before the search, for believing both that the dealer was evading tax and that relevant material would be found in the premises. The validity of the action had to be judged on the reasons existing at the time of authorisation and could not be supported later by fresh material in the affidavit. The record showing such pre-search satisfaction was not produced, and the Court drew an adverse inference against the revenue.

Conclusion: The action was held to be not in accordance with section 13(3) of the U.P. Sales Tax Act, 1948.

Issue (ii): Whether the safeguards of sections 100 and 165 of the Code of Criminal Procedure, 1973 were complied with under section 13(7) of the U.P. Sales Tax Act, 1948.

Analysis: Section 13(7) made the safeguards of sections 100 and 165 applicable to searches under the sales tax law. Those safeguards required observance of the prescribed procedure, including the statutory preconditions for search and the accompanying formalities. The respondents asserted compliance, but no supporting record was produced to show that the mandatory requirements had been followed.

Conclusion: The search and seizure were held not to have been conducted in accordance with sections 13(7) of the U.P. Sales Tax Act, 1948 read with sections 100 and 165 of the Code of Criminal Procedure, 1973.

Issue (iii): Whether the seized account books, registers and documents were liable to be returned to the petitioners.

Analysis: Once the search and seizure were found to be unlawful, the Court held that the materials recovered from the premises could not be retained by the authorities. However, to preserve the revenue's evidentiary interest, the sealed documents were directed to be opened in the presence of the petitioners or their representative, photocopies could be retained by the authorities, and the originals were to be returned.

Conclusion: The seized documents were directed to be returned to the petitioners after photocopies were taken by the sales tax authorities.

Final Conclusion: The writ petition succeeded in part, with relief limited to the return of the seized originals after copying, because the search and seizure were found unlawful for non-compliance with the statutory safeguards.

Ratio Decidendi: Where a statute authorises search and seizure only on pre-existing reasonable grounds and incorporates criminal procedure safeguards, the Court will test the legality of the action on the basis of contemporaneous material alone, and unlawfully seized documents may be ordered to be returned.

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