TaxTMI 
TaxTMI 
2004 (11) TMI 569
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....s custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty, or to prove or lead to the discovery of any fraud or omission in relation to any duty, shall at all reasonable times permit any person authorized in writing by the Collector to inspect for such purpose the registers, books, papers, documents and proceedings, and to take such notes and extracts as he may deem necessary, without fee or charge." The term 'public officer' is not defined in Section 73 nor in the interpretation clause. However, the term 'public office' is found to have been used in Section 33. Sub-Section(3) of Section 33 provides as under:- "33. (3) For the purposes of this section, in cases of doubt ___ (a) the State Government may determine what offices shall be deemed to be public offices; and (b) the State Government may determine who shall be deemed to be persons in charge of public offices." The term 'public officer having in his custody any registers etc.' as occurring in Section 73 can be defined by having regard to the expression 'public office' as occurring in Section 33. The central legis....
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...., constituted by the State Bank of India Act, 1955 a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 and in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, a Regional Rural Bank established under the Regional Rural Banks Act, 1976, the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964, National Bank for Agriculture and Rural Development established under the National Bank for Agriculture and Rural Development Act, 1981, the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956, The Industrial Finance Corporation of India established under the Industrial Finance Corporation Act, 1948, and such other financial or banking institution owned, controlled or managed by a State Government or the Central Government, as may be notified in this behalf by the Government. (2) Every person having in his custody or maintaining such registers, books, records, papers, documents or proceedings shall, when so required by the off....
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....; means, the Indian Stamp (A.P. Amendment) Act, 1986. (b) "Inspector-General of Registration and Stamps" includes the person authorized in writing by him as the Collector appointed under section 73 of the Act to exercise the powers under that Section. (c) 'Head of Office' means, the head of the Office inspected by the Inspector General of Registration and Stamps under section 73. (d) 'Section' means a section of the Act. (e) 'Any premises' includes any public office or any place where registers, books, documents etc., are kept under the custody of a person the inspection whereof may tend to secure any duty. 2. (1) The notes of inspection under section 73 shall be sent to the Head of office with a copy to the Head of the District office, if the office inspected is subordinate to him, or with a copy to the Head of the Department concerned, if the office inspected is the District or Regional Office. (2) The first reports of compliance shall be sent to the Inspector General of Registration and Stamps, immediately on receipt of the notes of inspection by the Head of Office, with a copy to the Head of the District Office concerned, if the offi....
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....d and to recover the same from the parties concerned. The grievance of the sugar companies is that in the course of their business they were entering into agreements with the sugarcane growers selling sugarcane to the sugar companies in compliance with the provisions of A.P. Sugarcane Control Order, 1965 in the proforma prescribed by Control Order. Several agreements entered into in the prescribed proforma were treated as unstamped (though they were not liable to be stamped, in the submission of sugar companies) and therefore were sought to be impounded. The grievance of private persons is that the documents in their possession are sought to be inspected, impounded and levied with duty though they were not tendered in evidence nor produced before any public office. A perusal of the judgment of the High Court shows that in holding the impugned Section 73 of the Act ultra vires of the Constitution and other provisions of the Indian Stamp Act, the High Court has arrived at four findings: firstly, that the amended Section 73 is inconsistent with the other provisions of the Act; secondly, that the provision is violative of the principles of natural justice; thirdly, the provision is ....
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....ving been reserved for the consideration of the President and having received his assent under Article 254(2) of the Constitution. The attack is on the ground of unreasonableness, inconsistency and excessive delegation of powers and also on account of drastic powers having been conferred on executive authorities without laying down guidelines. The provisions of Section 29 providing for the persons by whom duties are payable have been left untouched. So is with Section 31 dealing with 'adjudication as to proper stamp' which confers power on the Collector to adjudicate upon the duty with which a document shall be chargeable, though such document may or may not have been executed. The scheme of Section 31 involves an element of voluntariness. The person seeking adjudication must have brought the document to Collector and also applied for such adjudication. The document cannot be compelled to be brought before him by the Collector. Section 33 confers power of impounding a document not duly stamped subject to the document being produced before an authority competent to receive evidence or a person incharge of a public office. It is necessary that the document must have been p....
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....ll settled that such offence is liable to be condoned by payment of duty and penalty on the document and no prosecution can be launched except in the case of a criminal intention to evade the Stamp Law or in case of a fraud and that too after giving the person liable to be proceeded against, an opportunity of being heard. A bare reading of Section 73 as substituted by A.P. Act No.17 of 1986 indicates the infirmities with which the provision suffers. The provision empowers any person authorized in writing by the Collector to have access to documents in private custody or custody of a public officer without regard to the fact whether the documents are sought to be used before any authority competent to receive evidence and without regard to the fact whether such document would ever be voluntarily produced or brought before a public officer during the performance of any of his specified functions in his capacity as such. The power is capable of being exercised by such persons at all reasonable times and it is not preceded by any requirement of the reasons being recorded by the Collector or the person authorized for his belief necessitating search. The person authorized has been ves....
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....rrants, State officers raided many homes and other places connected with John Wilkes to locate his controversial pamphlets. Entick, an associate of Wilkes, sued the State officers because agents had forcibly broken into his house, broke locked desks and boxes, and seized many printed charts, pamphlets and the like. In a landmark judgment in Entick v. Carrington: (1765) (19 Howells' State Trials 1029) (95 Eng Rep 807), Lord Camden declared the warrant and the behaviour as subversive 'of all the comforts of society' and the issuance of a warrant for the seizure of all of a person's papers and not those only alleged to be criminal in nature was 'contrary to the genius of the law of England'. Besides its general character, the warrant was, according to the Court, bad inasmuch as it was not issued on a showing of probable cause and no record was required to be made of what had been seized. In USA, in Boyd v. United States (1886) 116 US 616 (626), the US Supreme Court said that the great Entick judgment was 'one of the landmarks of English liberty .. one of the permanent monuments of the British Constitution'. The Fourth Amendment in the US Constitution....
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....ontain a specific provision either as to 'privacy' or even as to 'unreasonable' search and seizure, but the right to privacy has, as we shall presently show, been spelt out by our Supreme Court from the provisions of Arts. 19(1)(a) dealing with freedom of speech and expression, Art. 19(1)(d) dealing with right to freedom of movement and from Art. 21 which deals with right to life and liberty. We shall first refer to the case law in US relating to the development of the right of privacy as these cases have been adverted to in the decisions of this Court. Privacy right in US initially concerned 'property': The American Courts trace the 'right to privacy' to the English common law which treated it as a right associated with 'right to property'. It was declared in Entick v. Carrington (1765) that the right of privacy protected trespass against property. Lord Camden observed: "The great end for which men entered into society was to secure their property. That right is preserved sacred and incommunicable in all instances where it has not been taken away or abridged by some public law for the good of the whole . By the laws of England, ever....
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....7 US 294 (304) as follows: " the premise that property interests control the right of the Government to search and seize has been discredited .. We have recognized that the principal object of the Fourth Amendment is the protection of privacy rather than property, and have increasingly discarded fictional and procedural barriers rested on property concepts." Katz and 'reasonable expectation of privacy': Thereafter, in Katz v. United States (1967) 389 US 347, there was a clearer enunciation when the majority laid down that the Fourth Amendment protected 'people and not places'. Harlan, J. in his concurring opinion said, - in a passage which has been held to be the distillation of the majority opinion - that the Fourth Amendment scrutiny would be triggered whenever official investigative activity invaded 'a reasonable expectation of privacy'. Although the phrase came from Justice Harlan's separate opinion, it is treated today as the essence of the majority opinion (Terry v. Ohio (1968) 392 US 1. (See Constitution and Criminal Procedure, First Principles by Prof. Akhil Amar, Yale University Press (1997), p. 183 fn.42). Stevens, J. in Thornburgh ....
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.... of sec. 21 of the N.Z. Bill of Rights, 1990. It said 'a search may be legal but unreasonable; it may be illegal but reasonable'. Probably, what was meant was that a search under a Court warrant may be lawful but the manner in which it is executed may be unreasonable. Likewise, there may be very rare exceptions where a search and seizure operation is conducted without a warrant on account of a sense of grave urgency for preventing danger to life or property or where delay in procuring a warrant may indeed result in the evidence vanishing but still the search or seizure might have been conducted in a reasonable manner. As to privacy of the home, the same has been elaborated. Chief Justice Burger stated in United States v. Orito: (1973) 413 US 139 that the Constitution extends special safeguards to the privacy of the home, just as it protects other special privacy rights such as those of marriage, procreation, motherhood, childbearing and education. Prof. Tribe states (p. 1412) that indeed, privacy of the home has the longest constitutional pedigree of the lot, "for the sanctity of the home has been embedded in our traditions since the origins of the Republic"; when we ret....
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....estriction on the right. The question whether search warrants for the seizure of documents from the accused were unconstitutional was not gone into. The Court, after referring to American authorities, observed that in US, because of the language in the Fourth Amendment, there was a distinction between legal and illegal searches and seizures and that such a distinction need not be imported into our Constitution. The Court opined that a search warrant was addressed to an officer and not to the accused and did not violate Art. 20(3). In the present discussion the case is of limited help. In fact, the law as to privacy was developed in latter cases by spelling it out from the right to freedom of speech and expression in Art 19(1)(a) and the right to 'life' in Art. 21. Two latter cases decided by the Supreme Court of India where the foundations for the right were laid, concerned the intrusion into the home by the police under State regulations, by way of 'domiciliary visits'. Such visits could be conducted any time, night or day, to keep a tag on persons for finding out suspicious criminal activity, if any, on their part. The validity of these regulations came under c....
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.... v. United States (1927) 277 US 438 (471); the privacy right can be denied only when an 'important countervailing interest is shown to be superior', or where a compelling State interest was shown. (Mathew, J. left open the issue whether moral interests could be relied upon by the State as compelling interests). Any right to privacy, the learned Judge said, (see para 24) must encompass and protect the personal intimacies of the home, the family, marriage, motherhood, procreation and child bearing. This list was however not exhaustive. He explained (see para 25) that, if there was State intrusion there must be 'a reasonable basis for intrusion'. The right to privacy, in any event, (see para 28) would necessarily have to go through a process of case-by-case development. Coming to the particular UP Regulations 855 and 856, in question in Govind, Mathew, J. examined their validity (see para 30). These, according to him, gave large powers to the police and needed, therefore, to be read down, so as to be in harmony with the Constitution, if they had to be saved at all. 'Our founding fathers were thoroughly opposed to a Police Raj!' he said. Therefore, the Court ....
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.... (1997) 1 SCC 301; Mr. X Vs. Hospital 'Z', (1998) 8 SCC 296; People's Union for Civil Liberties Vs. Union of India, (2003) 4 SCC 399; Sharda Vs. Dharmpal, (2003) 4 SCC 4931. The impugned provision of the A.P. Amendment on anvil : It is in the background of the above, the validity of sec. 73 of the Stamp Act, 1899 falls to be decided. The text of Sec.73 Indian Stamp Act and the text as amended in its application to State of A.P. have been set out in the earlier part of the judgment. It will be seen that under sec.73, the Collector could inspect the 'registers, books, records, papers, documents or proceedings' in the public office. Obviously, this meant that the inspection must relate to 'public documents' in the custody of the public officer or to public record of private documents available in his office. The inspection could be carried out only by a person authorized __ in writing __ by the Collector. The purpose of inspection has to be specific and has to be based upon a belief that (i) such inspection may tend to secure any (stamp) duty, or (ii) it may tend to prove any fraud or omission in relation to any duty or (iii) it may tend to lead to....
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.... which the material had been produced by the Banks, were defective and that the records had thus been illegally seized in violation of the Fourth Amendment. The request was denied by the trial Court, the Respondent was tried and convicted. The Court of Appeals reversed, holding that the subpoened documents fell within the constitutionally protected zone of privacy. On further appeal, the US Supreme Court restored the conviction holding that, once the documents reached the hands of a third party, namely, the Bank, the Respondent ceased to possess any Fourth Amendment interest in the Bank records that could be vindicated by a challenge to the subpoenas, that the materials were business records of the banks and not the respondents' private papers; that, there was no legitimate 'expectation of privacy' (as stated in Katz) in the contents of the original cheques and deposit slips, since the cheques were "not confidential communications" but negotiable instruments to be used in commercial transactions and the documents contained only information voluntarily conveyed to the Banks which was exposed to the employees in the ordinary course of business. The Court laid down a new p....
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....recy is a strange one, for a secret remains a secret even when shared with those whom one selects for one's confidence". Our cheques are not merely negotiable instruments but yet the world can learn a vast amount about us by knowing how and with whom we have spent our money. Same is the position when we use the telephone or post a letter. To say that one assumes great risks by opening a bank account appeared to be a wrong conclusion. Prof. Tribe asks a very pertinent question (p. 1392): "Yet one can hardly be said to have assumed a risk of surveillance in a context where, as a practical matter, one had no choice. Only the most committed - and perhaps civilly committable hermit can live without a telephone, without a bank account, without mail. To say that one must take a bitter pill with the sweet when one licks a stamp is to exact a highly constitutional price indeed for living in contemporary society". He concludes (p. 1400): "In our information-dense technological era, when living inevitably entails leaving not just informational footprints but parts of one's self in myriad directories, files, records and computers, to hold that the Fourteenth Amendment did not ....
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....#39;unreasonable' searches, but the Supreme Court has been willing to stamp nearly every troublesome form of police activity as either not a search or not unreasonable. Oddly enough, the Court has made the law in this area nearly unintelligible . . . . . " (vii) In this connection, two other articles, the 'Note, Government Access to Bank Records' (1974) 83 Yale Law Journal 1439 and 'A Bank customer has no reasonable expectation of Privacy of Bank Records', United States v. Miller: 14 San Diego L. Rev (1974) are also relevant. (quoted by Polyvious G. Polyviou P.67) (B) We shall next refer to the response by Congress to Miller. (As stated earlier, we should not be understood as necessarily recommending this law as a model for India). Soon after Miller, Congress enacted the 'Right to Financial Privacy Act, 1978 (Public Law No.95-630) 12 USC with ss.3401 to 3422). The statute accords customers of Banks or similar financial institutions, certain rights to be notified of and a right to challenge the actions of government in Court at an anterior stage before disclosure is made. Sec.3401 of the Act contains 'definitions'. Sec. 3402 is important, and it sa....
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....sec. 165(1) he must have reasonable grounds for believing that anything necessary for the purpose of an investigation into any offence, which he is authorized to investigate, may be found in any place within the limits of the police station and that such thing cannot, in his opinion, be otherwise obtained without undue delay. He has to record the grounds of his belief in writing and specify, so far as possible, the thing for which search is made. Sec.166 refers to the question as to when an officer-in-charge of a police station may require another to issue search warrant. In the Income-tax Act, 1961 elaborate provisions are made in regard to 'search and seizure in sec.132; power to requisition books of account etc. in sec. 132A; power to call for information as stated in sec. 133. Sec. 133(6) deals with power of officers to require any Bank to furnish any information as specified there. There are safeguards. Sec.132 uses the words "in consequence of information in his possession, has reason to believe". Sec. 132(1A) uses the words "in consequence of information in his possession, has reason to suspect". Sec. 132(13) says that the provisions of the Code of Criminal Procedure,....
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....ssive delegation as there are no guidelines in the Act and more importantly, the section allows the facts relating to the customer's privacy to reach non-governmental persons and would, on that basis, be an unreasonable encroachment into the customer's rights. This part of the Section 73 permitting delegation to 'any person' suffers from the above serious defects and for that reason is, in our view, unenforceable. The State must clearly define the officers by designation or state that the power can be delegated to officers not below a particular rank in the official hierarchy, as may be designated by the State. The A.P. amendment permits inspection being carried out by the Collector by having access to the documents which are in private custody i.e. custody other than that of a public officer. It is clear that this provision empowers invasion of the home of the person in whose possession the documents 'tending' to or leading to the various facts stated in sec. 73 are in existence and sec. 73 being one without any safeguards as to probable or reasonable cause or reasonable basis or materials violates the right to privacy both of the house and of the person....