Mandatory seizure safeguards and lawful notice basis govern sales tax proceedings; defective seizure and notice cannot stand.

A seizure of books of account under the Bengal Finance (Sales Tax) Act is invalid unless recorded reasons to suspect tax evasion exist before the seizure and the mandatory seizure receipt is issued at the relevant time; later assertions of reasons and the dealer's consent do not cure these defects, so the books must be returned. A notice under section 14(1) must also rest on a lawful basis disclosed in its own terms; where its recitals do not support the alleged contravention, the notice is liable to be quashed.

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Issues: (i) Whether the removal and seizure of the books of account on March 7, 1994 or March 15, 1994 was valid in the absence of recorded reasons to suspect evasion of tax and in the absence of a seizure receipt as required by law; (ii) Whether the notice dated June 9, 1994 issued under section 14(1) of the Bengal Finance (Sales Tax) Act, 1941 was valid.

Issue (i): Whether the removal and seizure of the books of account on March 7, 1994 or March 15, 1994 was valid in the absence of recorded reasons to suspect evasion of tax and in the absence of a seizure receipt as required by law.

Analysis: The removal of the books on March 7, 1994 was treated as seizure. The statutory scheme required a seizure to rest on recorded reasons to suspect evasion and also required issuance of a seizure receipt under section 14(3A) of the Bengal Finance (Sales Tax) Act, 1941. The materials produced did not show any pre-seizure recorded reason, and the post-dated seizure receipt did not disclose the basis for the alleged belief that tax was being evaded. Consent of the applicant did not cure the statutory defects, and the seizure could not be justified by a later assertion of reasons.

Conclusion: The seizure was invalid and the seized books of account were required to be returned to the applicant.

Issue (ii): Whether the notice dated June 9, 1994 issued under section 14(1) of the Bengal Finance (Sales Tax) Act, 1941 was valid.

Analysis: The notice was challenged on the footing that it alleged contravention of sections 7(1) and 6D of the Bengal Finance (Sales Tax) Act, 1941, although the applicant had already been registered as a dealer with effect from September 15, 1993 and there was no basis for invoking section 6D. The notice, as issued, did not disclose a lawful foundation consistent with its own recitals, and it could not be sustained as a valid investigative notice on the facts stated in it.

Conclusion: The notice dated June 9, 1994 was invalid and liable to be quashed.

Final Conclusion: The proceeding was allowed, the seizure and notice were quashed, and the respondents were directed to return the books of account forthwith.

Ratio Decidendi: A seizure under the sales tax law is invalid unless the statutory preconditions, including recorded reasons and the mandatory seizure receipt, are satisfied before or at the time of seizure, and a notice must stand or fall on the lawful basis disclosed in its own terms.

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