Bona fide suspicion for tax evasion sustains search and seizure, but undisputed stock cannot be retained under seizure.

Search and seizure under the West Bengal Sales Tax Act, 1994 is valid where the authority has a bona fide basis to suspect tax evasion. On the facts noted, false vehicle details, non-movement of the stated trucks, and an unaccepted sale explanation showed a paper transaction, so seizure of 23,075 kgs. of poppy seeds was upheld. The Tribunal also held that 1,200 kgs. of poppy seeds covered by an undisputed import and not linked to any doubtful transaction could not be retained, and directed its release to the petitioner.

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Issues: (i) whether the seizure of 23,075 kgs. of poppy seeds was legal and valid under the sales tax law; and (ii) whether the remaining 1,200 kgs. of poppy seeds, the import of which was not disputed, was liable to be released to the petitioner.

Issue (i): Whether the seizure of 23,075 kgs. of poppy seeds was legal and valid under the sales tax law.

Analysis: The power of search and seizure under section 67 of the West Bengal Sales Tax Act, 1994 depends on a bona fide reason to suspect tax evasion. On the materials collected by the authority, the vehicle details furnished by the petitioner were found to be false, the relevant trucks were shown not to have moved on the stated dates, and the alleged sales by Gopal & Co. were not accepted as genuine. The Tribunal held that the transaction was only a paper transaction and that the authority had acted on a valid and bona fide basis in sealing the godown and seizing the goods.

Conclusion: The seizure of 23,075 kgs. was held to be legal and valid, against the petitioner.

Issue (ii): Whether the remaining 1,200 kgs. of poppy seeds, the import of which was not disputed, was liable to be released to the petitioner.

Analysis: The Revenue did not dispute the import of 9,000 kgs. from Rajasthan, and the balance stock of 1,200 kgs. out of that quantity was not shown to be involved in any doubtful transaction. Since that quantity was admittedly covered by the undisputed import, there was no basis to retain it under seizure.

Conclusion: The Tribunal directed release of 1,200 kgs. of poppy seeds in favour of the petitioner.

Final Conclusion: The application succeeded only to a limited extent, with the seizure sustained for the disputed quantity and release ordered for the undisputed stock.

Ratio Decidendi: Search and seizure under the sales tax law can be sustained when the authority has a bona fide reason to suspect tax evasion, but goods covered by an undisputed and untainted transaction cannot be retained under seizure.

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