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of <h1>Court upholds search legality; questions tax assessment authority under Regulation 18(2) & 1358 F.</h1> The court found the search conducted by the Enforcement Wing of the Commercial Tax Department to be legal and within jurisdiction under Regulation 18(2). ... Imposition of tax on horseracing / betting - powers of Commercial Tax Department - Seizure of books of accounts - Scope of Hyderabad Horse Racing and betting Tax Regulation of 1358 F., (for short the Regulations which are framed in the erstwhile Hyderabad State in 1358 Fasli. - Held that:- The petitioner is a licensed book-maker, as defined under Regulation 12(c) of the Regulations. Regulation 16 clearly provides for payment of tax at 12.5% towards betting. As per Regulation 18(2) of the Regulations, all licensed book-makers shall keep the accounts as prescribed and officers permitted by the Government are also empowered to make inspection and take copies of such accounts. As per Regulation 19(2), all monies which a licensed book-maker is liable to make over to the prescribed officer under Section 17, shall be recovered from the licensed book-maker as public demand. Under the Scheme of the Regulations and the Rules made thereunder, if any amounts are withheld by the licensed book-maker, or in the event of suppression of turnover, there is no provision for the assessment of tax recoverable from the book- maker. The Regulations provide that all the monies which a licensed book-maker is liable to make over to the prescribed officer under Section 17, shall be recovered from the licensed book-maker as public demand. But, such recovery can be made only for the demand of tax payable by the petitioner. But, in the absence of any provision for assessment and determination of tax payable by the petitioner-book-maker, respondent does not have any authority or jurisdiction to initiate proceedings for recovery of tax from the petitioner. As the levy pertains to betting tax, unless there is specific and definite jurisdiction conferred on the respondent, it is not open to initiate such proceedings and make an assessment by issuing show-cause notice. The officer authorised by the Government is empowered to inspect and take copies of such accounts or any other material from the place other than Race Course area also, when there are allegations of suppression of turnover or illegal retention of collected tax monies. - Decided against appellant. Issues Involved:1. Legality of the search conducted by the Enforcement Wing of the Commercial Tax Department.2. Jurisdiction and authority to assess and recover tax from the petitioner.3. Power of inspection and search under the Hyderabad Horse Racing and Betting Tax Regulation of 1358 F.Issue-wise Analysis:1. Legality of the search conducted by the Enforcement Wing of the Commercial Tax Department:The petitioner argued that the search conducted on 07.08.2000 at the residence of one of the partners was illegal and without jurisdiction. The petitioner contended that the Regulations and Rules empower entry only into the Race Course and not into residential premises. The court, however, found this argument unconvincing. Regulation 18(2) allows authorized officers to inspect and take copies of accounts from any place, not just the Race Course, when there are allegations of suppressed turnover or illegal retention of tax monies. Therefore, the search and recovery of documents were deemed legal and within jurisdiction.2. Jurisdiction and authority to assess and recover tax from the petitioner:The petitioner claimed that there was no provision for assessment under the Regulations, and thus, the respondent had no authority to initiate proceedings to recover tax. The court agreed with this argument, stating that under the Hyderabad Horse Racing and Betting Tax Regulation of 1358 F. and the Rules, there is no provision for the assessment of tax recoverable from the book-maker. The Regulations only provide for the recovery of monies as public demand but do not empower the respondent to assess and determine the tax payable by the petitioner. Consequently, the respondent's actions to initiate proceedings and issue a show-cause notice were deemed without jurisdiction and authority.3. Power of inspection and search under the Hyderabad Horse Racing and Betting Tax Regulation of 1358 F.:The court clarified that under Regulation 18(2), it is obligatory for licensed book-makers to maintain accounts and permit authorized officers to inspect and take copies of such accounts. This power of inspection extends beyond the Race Course to any place where relevant accounts or materials may be found. Thus, the respondent's authority to inspect the premises of licensed book-makers, including places other than the Race Course, was upheld.Conclusion:The court held that while the respondent had the authority to inspect the premises of licensed book-makers, it did not have the jurisdiction to proceed with assessment proceedings for alleged suppressed turnover under the current scheme of the Hyderabad Horse Racing and Betting Tax Regulation of 1358 F. The court suggested that the state should consider new legislation to address the lacunae in the Regulations to prevent revenue leakage. The writ petitions were disposed of accordingly, with no order as to costs.
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