Recorded reasons before seizure are mandatory under sales tax law; one seizure was invalid, another upheld on substantial compliance.

A seizure under section 66 of the West Bengal Sales Tax Act is valid only if reasons for believing tax evasion are recorded in writing before the seizure, so the statutory safeguard can be tested as existing at the time of action. On the first seizure at 70, Nalini Sett Road, the reasons were written after the seizure and the action was held invalid; on the second seizure at Stephen House, B.B.D. Bag, the reasons were recorded beforehand and disclosed a sufficient basis for suspicion, so the seizure was upheld despite the absence of two independent witnesses, as substantial compliance with rule 207 was accepted.

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Issues: (i) Whether the seizure of books of account and documents at 70, Nalini Sett Road, Calcutta on 25 September 1995 was valid under section 66 of the West Bengal Sales Tax Act, 1994; (ii) Whether the seizure of books of account and documents at Stephen House, 29/1, 4E B.B.D. Bag, Calcutta on 25 September 1995 was valid under section 66 of the West Bengal Sales Tax Act, 1994 and rule 207 of the West Bengal Sales Tax Rules, 1995.

Issue (i): Whether the seizure of books of account and documents at 70, Nalini Sett Road, Calcutta on 25 September 1995 was valid under section 66 of the West Bengal Sales Tax Act, 1994.

Analysis: The power of seizure under section 66 depends upon reasons being recorded in writing before the seizure is made, so that the officer's suspicion of attempted tax evasion can be tested as existing at the time of action. The recorded reasons for the Nalini Sett Road seizure showed that the seizure had already been effected before the reasons were written, which destroyed the statutory safeguard and indicated non-compliance with the mandatory precondition. In such a case the seizure power cannot be sustained as a valid exercise of jurisdiction.

Conclusion: The seizure at 70, Nalini Sett Road, Calcutta was invalid and the assessee succeeded on this issue.

Issue (ii): Whether the seizure of books of account and documents at Stephen House, 29/1, 4E B.B.D. Bag, Calcutta on 25 September 1995 was valid under section 66 of the West Bengal Sales Tax Act, 1994 and rule 207 of the West Bengal Sales Tax Rules, 1995.

Analysis: The recorded reasons for the B.B.D. Bag seizure were found to have been prepared before the seizure and to disclose a sufficient basis for suspicion of tax evasion. Rule 207 requires seizure, as far as possible, to follow the criminal procedure safeguards, but the absence of two independent witnesses was not treated as fatal in the circumstances. The presence of one witness, who was connected with the company in a responsible capacity, was accepted as sufficient compliance, and the use of the expression 'reason to believe' in the seizure receipt was treated as not defeating the otherwise valid statutory basis of suspicion.

Conclusion: The seizure at Stephen House, B.B.D. Bag, Calcutta was valid and lawful, and the assessee failed on this issue.

Final Conclusion: The application succeeded only in part: the first seizure was quashed and the books and documents were directed to be returned, while the second seizure was upheld.

Ratio Decidendi: A seizure under section 66 is valid only when reasons are recorded in writing before the seizure and disclose a bona fide basis for suspecting tax evasion; where that safeguard is satisfied, minor irregularities in the seizure process do not necessarily invalidate the seizure if substantial compliance with the governing rules is established.

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