Inspection under section 67 requires prior Joint Commissioner authorisation; confidential reasons need not be disclosed to the taxable person.

Under section 67, a subordinate officer cannot inspect a taxable person's premises unless the Joint Commissioner first records reasons to believe and issues written authorisation. The inspection power is therefore conditional on prior authorisation, and the statutory scheme was complied with on the facts. The taxable person need not be furnished with the authorisation order, the underlying reasons, or the confidential material supporting it, although the fact of authorisation must be intimated during inspection. The challenge to the inspection proceedings therefore failed because no legal infirmity was shown in the exercise of the inspection power.

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Issues: (i) Whether an officer below the rank of Joint Commissioner can inspect the premises of a taxable person without authorisation from the Joint Commissioner. (ii) Whether the authorisation issued by the Joint Commissioner under section 67 has to be furnished to the taxable person.

Issue (i): Whether an officer below the rank of Joint Commissioner can inspect the premises of a taxable person without authorisation from the Joint Commissioner.

Analysis: Under section 67(1), the power to form the requisite reasons to believe vests in the proper officer not below the rank of Joint Commissioner, and only thereafter may another officer be authorised in writing to inspect the place of business. The inspection power is therefore not exercisable independently by an officer below that rank. On the facts, the authorisation issued by the Joint Commissioner showed compliance with the statutory scheme.

Conclusion: An officer below the rank of Joint Commissioner cannot inspect the premises of a taxable person without authorisation from the Joint Commissioner.

Issue (ii): Whether the authorisation issued by the Joint Commissioner under section 67 has to be furnished to the taxable person.

Analysis: The information leading to the formation of reasons to believe may be confidential and need not be disclosed to the taxable person. However, the inspecting officer should inform the taxable person that authorisation has been received from the Joint Commissioner. A copy of the authorisation and the underlying reasons are not required to be supplied to the taxable person.

Conclusion: The authorisation and the details of the Joint Commissioner's order need not be provided to the taxable person, though the fact of authorisation must be intimated during inspection.

Final Conclusion: The challenge to the inspection proceedings failed because the statutory precondition of authorisation was satisfied and no legal infirmity was shown in the respondents' action.

Ratio Decidendi: Under section 67, inspection by a subordinate officer is valid only when preceded by reasons to believe recorded by the Joint Commissioner and authorisation in writing, while the underlying confidential material need not be disclosed to the taxable person.

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