Inspection powers cannot be used to collect alleged tax dues before assessment; cheques collected during verification had to be returned.

Section 64(4) of the Tamil Nadu Value Added Tax Act, 2006 did not authorise enforcement officials to collect cheques towards alleged tax dues during inspection, where assessment had not been completed and monthly returns had not been verified. The court treated the collection of cheques at the inspection stage as lacking statutory sanction and beyond the scope of the inspection power. The petitioner was therefore entitled to return of the cheques, while the assessing authority remained free to proceed with lawful assessment for the relevant years.

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Issues: Whether the respondents had authority under section 64(4) of the Tamil Nadu Value Added Tax Act, 2006 to collect cheques towards alleged tax dues at the time of inspection, and whether the petitioner was entitled to return of the cheques.

Analysis: The inspection and audit were conducted in the course of verification of the dealer's records, but the statutory power invoked did not confer authority to realise tax immediately at the inspection stage. Collection of cheques without completion of assessment and without verification of monthly returns was held to be beyond the powers of the enforcement officials. The respondents did not dispute the petitioner's factual assertions, and the court accepted that the impugned collection lacked statutory sanction.

Conclusion: The petitioner was entitled to return of the cheques, and the respondents had no authority to collect them during inspection.

Final Conclusion: The writ petition succeeded by securing return of the cheques, while leaving the assessing authority free to proceed with lawful assessment for the relevant years.

Ratio Decidendi: Statutory inspection powers do not include authority to collect tax dues at the inspection stage unless the statute expressly provides for such collection.

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