TaxTMI 
TaxTMI 
1974 (2) TMI 61
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.... 4 who described themselves as Inspectors of Commercial Taxes. All the books of account, documents, registers and receipts, etc., were seized by the said respondents. Similar search was made at the factory premises of the petitioner at Kathalia, Howrah, by respondents Nos. 5 to 7 and all valuable documents, files, papers and vouchers, current cash books and registers were removed by the said respondents. It is alleged that the said search was conducted in an arbitrary manner. After the said search was conducted, the authorised Advocate of the petitioner visited the Assistant Commissioner of Commercial Taxes (Central Section) and requested him to release the books seized since it was becoming impossible on the part of the petitioner to maint....
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....ection 14(3) of the Act has been delegated to the Inspector under rule 71, the Inspector who has to make the search and seizure has himself to form an opinion as to whether the conditions for the exercise of the powers under section 14(3) do exist. In the instant case, Mr. Chatterjee submitted that the persons who have conducted the search are 7 in number. So the reasons to suspect could not be jointly in the minds of the said 7 Inspectors who joined together to make the search. Sub-section (3) of section 14 reads as follows: "If the Commissioner has reason to suspect that any dealer is attempting to evade payment of any tax under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers or documents of t....
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....ding of reasons is absolutely necessary, otherwise the powers conferred upon the Commissioner under sub-section (3) of section 14 would become arbitrary. The Commissioner can pick and choose, and even without any suspicion, the powers under section 14(3) can be exercised. The result would be that the citizen's fundamental rights guaranteed under articles 14 and 19(1)(f) and (g) of the Constitution would be jeopardised. It is true that sufficiency of the reasons recorded by the Commissioner cannot be investigated by the court, but the court can examine the materials whether an honest and reasonable person can base his reasonable belief upon such materials. Therefore, as no reasons have been recorded before the search and seizure, in my view,....
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....Income-tax Officer considered the said documents relevant for two reasons. Firstly, the Income-tax Officer did not have and could not have had any knowledge about the contents of the documents, secondly, the omnibus nature of the order passed also indicated non-application of mind. Accordingly, summons issued under section 131 of the Act was quashed and set aside on the ground that there was no application of mind by the Income-tax Officer and, as such, the impugned summons was beyond his power under section 131 of the Income-tax Act, 1961. Under sub-section (1) of section 14, the Commissioner may, subject to such conditions as may be prescribed, require any dealer (a) to produce before him any accounts or documents, (b) to furnish any info....