Search warrant safeguards failed: non-disclosure, no independent witnesses, and no seizure receipt rendered the search illegal.

Recorded reasons and material indicating tax evasion were sufficient to satisfy the requirement of a lawful search authorisation. However, the record did not establish that the warrant was shown to the persons in charge at the searched premises, and the search procedure was further vitiated by failure to call independent witnesses and to prepare and serve the contemporaneous receipt when the sealed boxes were taken away. The search and seizure were therefore treated as illegal, although the seized material could still be examined with due caution for determining tax evasion in accordance with law.

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Issues: (i) Whether the authorisation for search was issued in accordance with law and on recorded reasons. (ii) Whether the authorisation was shown to the persons in charge before the search. (iii) Whether the search and seizure were vitiated for want of independent witnesses and receipt.

Issue (i): Whether the authorisation for search was issued in accordance with law and on recorded reasons.

Analysis: The authorisation was preceded by material indicating evasion of tax and the Commissioner recorded satisfaction before issuing the warrant. The statutory requirement of forming a reason to believe on the basis of information received was therefore met.

Conclusion: This issue was decided against the assessee.

Issue (ii): Whether the authorisation was shown to the persons in charge before the search.

Analysis: No material was produced to show that the warrant was disclosed to the persons present at the searched premises. The record did not establish such disclosure, and the respondents did not state specifically to whom it was shown.

Conclusion: This issue was decided in favour of the assessee.

Issue (iii): Whether the search and seizure were vitiated for want of independent witnesses and receipt.

Analysis: The governing procedure required compliance with the search safeguards applicable to police searches. The respondents failed to call independent witnesses, failed to prepare and serve the requisite receipt at the time the sealed boxes were taken away, and did not follow the prescribed procedure in a lawful manner. These lapses went to the root of the search and seizure.

Conclusion: This issue was decided in favour of the assessee.

Final Conclusion: The search and seizure were held to be illegal, though the respondents were left free to examine the seized material with due caution for the purpose of determining tax evasion in accordance with law.

Ratio Decidendi: Where a taxing statute incorporates the criminal search procedure, the safeguards relating to disclosure of authority, independent witnesses, and contemporaneous seizure receipt must be followed, and material collected in breach of those safeguards may be considered only with caution.

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