Sales tax search and seizure powers may cover business premises, but confiscation must fit the Act and include procedural safeguards.

Inspection powers under a sales tax law may extend to search of business premises and seizure of accounts or goods where the statutory language links inspection with access to the premises, but that construction does not justify entry into purely residential accommodation without a magistrate's warrant. A seizure and confiscation provision must also fit the Act's charging and recovery scheme; if a proviso is inconsistent with that scheme and inseverable, the provision fails. Procedural safeguards, including recorded reasons, receipts, limits on retention and higher approval for further retention, are relevant to whether search and seizure restrictions are reasonable under Articles 19(5) and 19(6).

---

---

Issues: (i) whether section 41(2) of the Madras General Sales Tax Act, 1959 authorised search of business premises and seizure of accounts and goods; (ii) whether section 41(4) and its second proviso were within the legislative competence of the State Legislature; and (iii) whether sections 41(2) and 41(3) imposed unreasonable restrictions on the rights protected by article 19(1)(f) and (g) of the Constitution.

Issue (i): whether section 41(2) of the Madras General Sales Tax Act, 1959 authorised search of business premises and seizure of accounts and goods.

Analysis: The provision required accounts, records, goods, and business premises to be open to inspection. Reading the power to inspect business premises together with the power to inspect accounts and goods, the Court held that the authority to enter and inspect necessarily carried with it the power to search the business premises and the accounts or goods found there. The proviso to sub-section (2), which referred to searches under that sub-section and required compliance, so far as may be, with the Code of Criminal Procedure, 1898, reinforced that construction. The power did not extend to purely residential accommodation except on a magistrate's warrant.

Conclusion: Section 41(2) did authorise search of business premises, but not purely residential accommodation without a warrant.

Issue (ii): whether section 41(4) and its second proviso were within the legislative competence of the State Legislature.

Analysis: Power to search and seize in tax legislation may be ancillary to the taxing entry for preventing evasion. The Court, however, found the second proviso to section 41(4), which required payment of tax in addition to the prescribed sum before confiscation, to be repugnant to the general scheme of the Act because tax in most cases was recoverable at the first point of sale. That proviso was treated as not severable from the main provision. On that narrower ground, the sub-section could not stand.

Conclusion: Section 41(4), along with its provisos, was invalid and could not be upheld.

Issue (iii): whether sections 41(2) and 41(3) imposed unreasonable restrictions on the rights protected by article 19(1)(f) and (g) of the Constitution.

Analysis: The proviso to section 41(2) attracted the safeguards applicable to searches under the Code of Criminal Procedure, 1898, including the requirements analogous to section 165. The search power was therefore not arbitrary. Section 41(3) also contained safeguards: reasons had to be recorded in writing, a receipt had to be given, retention was limited to what was necessary, and further retention beyond thirty days required higher approval. These procedural controls rendered the restrictions reasonable having regard to the object of preventing tax evasion.

Conclusion: Sections 41(2) and 41(3) were valid reasonable restrictions protected by article 19(5) and article 19(6) of the Constitution.

Final Conclusion: The challenge to the search and seizure provisions succeeded only in part, but the overall result remained that the appeals failed and the relief granted to the petitioners was maintained because the search warrant was defective, the confiscation provision could not stand, and the safeguards governing seizure had not been observed.

Ratio Decidendi: In a taxing statute, powers of inspection may include search where the statutory scheme so indicates, but any seizure or confiscation mechanism must be consistent with the charging and recovery structure of the Act and supported by adequate procedural safeguards to withstand constitutional scrutiny.

---