Jurisdiction of enforcement wing to collect tax rejected where statute limits it to seizure and inquiry only.

The enforcement wing under section 41(3) of the Tamil Nadu General Sales Tax Act, 1959 was confined to suspecting evasion, recording reasons, seizing records and retaining them for inquiry; it had no power to assess or collect tax. On that basis, the Madras High Court held that the levy and recovery made by the enforcement wing were without jurisdiction. The impugned order was quashed, and the amount collected was directed to be transferred to the regular assessing authority for adjustment against the dealer's tax dues.

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Issues: Whether the enforcement wing had jurisdiction under section 41(3) of the Tamil Nadu General Sales Tax Act, 1959 to levy and collect tax from the dealer and whether the impugned order and recovery were sustainable.

Analysis: Section 41(3) empowered the officer only to suspect evasion, record reasons, seize accounts and other documents, and retain them for examination or inquiry for the prescribed period. The provision did not confer authority on the enforcement wing to assess tax or recover tax dues. Since the respondent had assessed tax and recovered Rs. 1 lakh by cheque, the collection was without jurisdiction.

Conclusion: The enforcement wing had no jurisdiction to levy and collect the tax. The impugned order was quashed and the amount was directed to be transferred to the regular assessing authority for adjustment against tax dues.

Ratio Decidendi: Where a statute confines the enforcement authority to seizure and retention of records for inquiry, any levy or collection of tax by that authority is without jurisdiction and liable to be quashed.

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