TaxTMI 
TaxTMI 
1989 (8) TMI 336
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....ry 4, 1987. Those books of account were kept by the applicant, hoping that claimants thereof would come to take delivery. But no one, in fact, came. Those books of account were also seized on February 7, 1987. An application under article 226 of the Constitution of India challenging the said search and seizure was moved in the High Court on March 12, 1987, and an interim order was obtained thereon. The applicant goes on to say that it received an order dated January 30, 1989, informing that sanction in terms of proviso (b) to section 14(3A) of the BFST Act had been accorded by the Additional Commissioner of Commercial Taxes for retention beyond the period of one year of the seized books of account and documents till January 31, 1990. Brief reason necessitating the retention was mentioned in the order as noncompletion of examination of the seized books of account (annexure "G"). The order of retention has been challenged as ultra vires, mala fide, without jurisdiction and bad in law on various grounds including the absence of conditions precedent for the exercise of powers under section 14(3A), proviso (b), not giving an opportunity of being heard before the approval was given, inad....
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.... the High Court, we could not hear that application, in which the search and seizure have been challenged. In the present hearing we have confined ourselves, as we should, only to the question of retention of seized books of account, etc., up to January 31, 1990 by the impugned order dated January 30, 1989 and to the consequent question of investigation of the books of account said to be belonging to companies and firms other than the applicant. Mr. Bhattacharjee, learned advocate for the applicant, and Mr. Chakraborty, learned State Representative, were in agreement with us in this respect. 4.. Mr. M.L. Bhattacharjee appearing for the applicant mainly contended as follows: (i) The impugned retention order dated January 30, 1989, passed long after the expiry of one year from the date of seizure, is void and without jurisdiction. (ii) The order is bad for want of communication of the reasons stated in writing by the concerned Commercial Tax Officer for obtaining sanction for retention up to January 31, 1990. (iii) The order is vitiated for not giving any prior opportunity of being heard to the applicant. (iv) The period of two years from the date of seizure was adequa....
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....ny of the accounts, registers or documents seized by him under sub-section (3) and shall retain any of them only for such period as may be necessary for examination thereof or for prosecution or for any of the purposes of this Act: Provided that- (a) the Commissioner shall not retain any of the accounts, registers or documents seized by him under sub-section (3) for a period exceeding one year from the date of the seizure unless he records, in writing, the reasons thereof, and (b) any person, appointed to assist the Commissioner under subsection (1) of section 3, shall not retain any of the accounts, registers or documents seized by him under sub-section (3) for a period exceeding one year from the date of seizure unless he states the reasons in writing thereof and obtains sanction, in writing, of the Commissioner in respect thereof: ................." (ii) Section 132(8) of the Income-tax Act, 1961: "132(8). The books of account or other documents seized under subsection (1) or sub-section (1A) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of seizure unless the reasons for retaining the sam....
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....sary implication that the reasons stated in writing for obtaining sanction shall be communicated to the person from whom the documents were seized. Otherwise, the requirement of stating the reasons in writing becomes pointless. The ratio of [1984] 145 ITR 477 (SC) (Commissioner of Income-tax v. Oriental Rubber Works) is that such reasons must be communicated expeditiously and non-communication will vitiate the order passed. We are of the view that this ratio is equally applicable to a case under section 14(3A), proviso (b) of the BFST Act, 1941. 8.. The record of the case containing the proposal for retention up to January 31, 1990, with reasons in writing submitted by the Commercial Tax Officer for sanction of the Additional Commissioner has not been produced before us. So, we are unable to assume in what manner the proposal was submitted. If Mr. P.K. Chakraborty's submission (that reason stated by the Commercial Tax Officer was only that examination could not be completed) is correct, it can be said that the Additional Commissioner, while granting the sanction, merely mechanically passed the order without due application of mind. That is not what is contemplated by the relevan....