1974 (8) TMI 52 - HC - Income Tax

Supreme Court Validates Tax Search & Seizure Laws, Dismisses Constitutional Challenge

The Supreme Court upheld the validity of the search and seizure conducted under section 132 of the Income-tax Act and rule 112 of the Income-tax Rules. It ... Reason To Believe, Search And Seizure Issues:1. Validity of search and seizure under section 132 of the Income-tax Act, 1961 and rule 112 of the Income-tax Rules, 1962.2. Contention regarding the necessity of giving notice before conducting a raid for seizure of documents.3. Allegation of mala fide orders of search and seizure.Analysis:The judgment dealt with the validity of search and seizure conducted by income-tax officials at the premises of the petitioner. The Supreme Court had previously upheld the constitutionality of section 132 of the Income-tax Act and rule 112 of the Income-tax Rules, emphasizing the safeguards in place to prevent abuse. The power to order search and seizure was restricted to senior officers, requiring a reasonable belief and specific authorization for the search. The Court rejected the argument that these provisions violated constitutional rights under articles 19(1)(f) and (g).Regarding the contention that a notice should have been given before conducting the raid, the Court dismissed the argument, citing the Supreme Court's decision that such a requirement would not be practical in cases where the person may not comply or may destroy evidence upon notice. The Commissioner of Income-tax had valid reasons for ordering the search, including information about duplicate account books maintained by the petitioner.The petitioner also alleged mala fide intentions behind the search and seizure. However, the Court found no evidence to support these claims. The procedures followed during the search, including showing the authorization warrant and obtaining signatures, were deemed appropriate. The Court dismissed the grievance that a copy of the warrant was not provided, as it was not a requirement under the rules. Allegations made in the rejoinder without prior mention in the petition were disregarded as an afterthought.Ultimately, the Court found no merit in the writ petition and dismissed it with costs. The stay orders previously granted were vacated, allowing the revenue department to proceed with final orders based on the seizures. The petitioner's concerns about potential clarifications passed during the case were noted, ensuring that any clarifications would not be nullified by the judgment.