TaxTMI 
TaxTMI 
1994 (6) TMI 204
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....ction also. Joseph Antony, owner of these business units was absent during the inspection. However, the accountant was present during the inspection and seizure of the documents. Representations were filed before the authorities for return of the documents seized from the above business premises. However, the documents were not returned and hence these two writ petitions were filed. O.P. No. 1239 of 1994 is filed on behalf of M/s. Supreme Hardwares and O.P. No. 1474 of 1994 is on behalf of M/s. A.J. Traders. Though the search and seizure was sought to be quashed on different grounds, during the course of the hearing the petitioners restricted their prayers for a direction to the authority concerned for return of the documents seized during the inspection. 3.. On behalf of fourth respondent, the Government Pleader has submitted a statement on February 23, 1994, in O.P. No. 1239 of 1994, which is common to both the cases. Exhibits R4(a) and R4(c) produced along with the said statement, are the shop inspection reports and exhibits R4(b) and R4(d) are the mahazars prepared while effecting the search and seizure of the documents. Various allegations contained in the writ petitions we....
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....igher authority under sub-section (6) of section 28 has been obtained within sixty days from the date of seizure unless they are required for a prosecution." The seizure of the documents and retention of the same by the officers are restrictions imposed on the freedom to carry on any trade or business guaranteed to the citizens under the Constitution. The fundamental right guaranteed to the citizen to carry on any trade or business under article 19(1)(g) of the Constitution is not an absolute right, but it is liable to be restricted under clause (6) thereof. The restrictions which can be imposed in the interest of general public under clause (6) shall be reasonable. It cannot be said that the provisions authorising inspection and seizure of documents are unreasonable restrictions in carrying on trade or business and such provisions can be sustained in the interest of general public. They are incidental or ancillary power of legislation under entry 54 of List II of the Seventh Schedule. These are the powers intended to check evasion of tax. The Supreme Court in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 20 STC 453 held: "It is also not in doubt that....
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....rticle 19(1) and social control permitted by clause (6) of article 19, it must be held to be wanting in that quality. See Chintaman Rao v. State of Madhya Pradesh AIR 1951 SC 118. The courts are bound to examine not only the reasonableness of a provision but also every action of the officers exercising powers under the provision. There must be proper safeguards in the provision from the arbitrary action of the officers who exercise power under the provisions which impose reasonable restriction in the enjoyment of the fundamental right. The Full Bench of the Bombay High Court in Jeshingbhai Ishwarlal v. Emperor AIR 1950 Bom 363 observed: "It is not for the Legislature to determine whether the restrictions are reasonable or not. It is for the court of law to consider the reasonableness of the restrictions imposed upon the rights. 'Reasonable' is an objective expression and its objectivity is to be determined judicially by the court of law. There is no limit placed upon the power of the court to consider the nature of the restrictions. The court must look upon the restrictions from every point of view. It being the duty of the court to safeguard fundamental rights, the greater is the ....
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....ocuments within a period of thirty-days from the date of seizure. On the other hand, section 28(6) creates a prohibition on the officer in retaining the seized documents beyond a period of thirty days from the date of seizure. The cumulative effect of the provision contained in section 28(6) and rule 34(9) drives me to conclude that the documents seized by the officer under sub-section (5) shall be returned to the dealer within a period of thirty days from the date of seizure. This can be adopted as a general rule in the interest of general public. However, this rule has got certain well-defined exceptions. The documents can be retained by the officer beyond the period of thirty-days if they are required for prosecution under the Act. The retention can also be had for a period of sixty days with permission of the next higher authority. The permission by next higher authority to retain the documents beyond thirty days has no relevance in taking decision for prosecution. Even in the absence of a decision for initiating prosecution, documents can be retained for a period of sixty days with the permission of the next higher authority. But in case the officer who seized the document ....
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....rosecution of the dealer and obtaining permission from the next higher authority within thirty days of the seizure of the documents are pre-requisites for further retention. These requirements are sufficient safeguards available to a dealer from whose custody the documents are seized. Such safeguards can also be in the interest of general public inasmuch as the seizure of documents from a dealer would sometimes work against the public interest itself. It cannot be said, by seizure of documents the dealer alone is affected. Customers who are having transactions with such dealer would be faced with hurdles in the absence of regular accounts maintained by the dealer. The possibility of a section of the public being affected by the seizure of documents from a dealer cannot be totally ruled out. It may be so, because the words "in the interest of general public" contained in clause (6) of article 19 of the Constitution are required to be construed with wide ambit and scope. 7.. In Mubarak Stores v. Intelligence Officer [1974] 33 STC 526; 1974 KLT 327, a learned single Judge of this Court said: "Seizure and retention of a dealer's books of account by an officer are serious inro....
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...., Sri R. Krishnaraj, further argued that the communication of the decision to the dealer by the officer whether the seized documents are required for prosecution is a necessary requirement to be complied with. He also pleads that such communication shall be made within the period of thirty days from the date of seizure. The provision contained in sub-section (6) of section 28 does not in terms authorise the communication of the decision to the dealer. When the officer seizing the documents is empowered to take a decision within thirty days it is difficult to countenance a plea that such decision shall be communicated to the dealer within thirty days from the date of seizure. Therefore, the question remains to be examined is whether the non-communication of the decision would be an unreasonable restriction on the dealer's right to carry on the business and trade. Can it be said the communication of the decision to the dealer is a necessary requirement or an essential pre-requisite for the continued retention of the documents? It can be said so. The Supreme Court in Commissioner of Income-tax v. Oriental Rubber Works [1984] 145 ITR 477 had occasion to consider the question whether th....
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....me Court was applied by the Delhi High Court in Survir Enterprises v. Commissioner of Income-tax, Central Range, New Delhi [1986] 157 ITR 206 and in Thanthi Trust v. Commissioner of Income-tax [1987] 167 ITR 397 (Delhi); [1987] 62 CTR 167 (Delhi). Earlier, the Madhya Pradesh High Court in Commissioner of Income-tax v. Karelal Kundanlal Trust [1983] 36 CTR 295 (MP) and the Calcutta High Court in Commissioner of Income-tax v. Mahabir Prasad Poddar [1974] 93 ITR 215 expressed the same view. 10.. After considering the scheme of the provisions contained in subsection (6) of section 28, and rule 34(9) of the Kerala General Sales Tax Rules, I am of the view that the officer who seized the documents under sub-section (5) of section 28 shall take a decision within a period of thirty days from the date of seizure whether such seized documents are required for any prosecution under the Act and such decision shall be communicated to the assessee. Such communication of the decision need not be within thirty days of seizure as noticed earlier; it can be after the expiry of thirty days from the date of seizure but it cannot under any circumstances be delayed indefinitely. The ratio of the deci....