Search and seizure safeguards under sales tax law require strict procedure, and continued retention needs a reasoned timely order.

Statutory inspection under the Rajasthan Sales Tax Act differs from search and seizure: once authorities move to discover and seize incriminating material on suspicion of evasion, the search procedure under the Code of Criminal Procedure applies, and the absence of a search warrant and independent witnesses rendered the seizure invalid. Retention of seized books beyond the prescribed period also required a reasoned, timely order by the Commissioner; in its absence, continued custody was illegal. By contrast, the file transfer under Rule 52(1) was sustained because notices were issued and an opportunity to object was given. The writ succeeded only to the extent of return of the seized records, while the assessment and transfer order were not quashed.

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Issues: (i) Whether the search and seizure of the assessee's account-books and documents was valid under Section 22 of the Rajasthan Sales Tax Act, 1954. (ii) Whether retention of the seized books and documents beyond the statutory period without a reasoned order was lawful. (iii) Whether transfer of the assessee's file under Rule 52(1) of the Rajasthan Sales Tax Rules, 1955 was vitiated for want of proper notice and hearing.

Issue (i): Whether the search and seizure of the assessee's account-books and documents was valid under Section 22 of the Rajasthan Sales Tax Act, 1954.

Analysis: A distinction was drawn between survey and inspection on the one hand and search and seizure on the other. Inspection of business is permissible under Section 22(2), but once the authorities proceed to discover and seize incriminating material on suspicion of tax evasion, the matter falls within Section 22(4) read with Section 22(8), and the procedure applicable to searches under the Code of Criminal Procedure must be followed. As no search warrant was obtained and no independent witnesses were joined, the mandatory search procedure was not complied with.

Conclusion: The search and seizure were held to be invalid.

Issue (ii): Whether retention of the seized books and documents beyond the statutory period without a reasoned order was lawful.

Analysis: The proviso to Section 22(3) places a ceiling on retention and permits further custody only on a reasoned order by the Commissioner. The Court treated this requirement as mandatory because it operates as a safeguard against arbitrary deprivation of business records and ensures expeditious action. In the absence of any produced order showing written reasons or lawful extension before expiry of the prescribed period, continued retention could not be upheld.

Conclusion: The retention beyond the statutory period was held to be illegal.

Issue (iii): Whether transfer of the assessee's file under Rule 52(1) of the Rajasthan Sales Tax Rules, 1955 was vitiated for want of proper notice and hearing.

Analysis: The record showed issuance of notices, opportunity to file objections, and further opportunity before the transfer order was made. The petitioner did not avail itself of the opportunity within time, and the belated reply reached after the matter had already been considered. On these facts, compliance with Rule 52(1) and observance of fair procedure were accepted.

Conclusion: The transfer order was upheld.

Final Conclusion: The writ petition succeeded only to the limited extent that the seized account-books and documents had to be returned, while the assessment founded upon those materials was not quashed and the transfer of the file was sustained.

Ratio Decidendi: Where statutory inspection turns into a search for incriminating material, the search procedure prescribed by law must be strictly followed, and retention of seized records beyond the prescribed period is valid only on a reasoned, timely order by the competent authority.

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