TaxTMI 
TaxTMI 
2005 (5) TMI 40
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....the petitioners have, inter alia, prayed that such warrant of authorisation and the impugned notices dated February 20, 2001, issued, under section 158BC of the Act be quashed as the same is unconstitutional, illegal and void ab initio and, consequently, the petitioners have also prayed that the documents/valuables, etc., recovered from them during the impugned illegal search and seizure operations carried out by the respondents be returned to them. In Writ Petition No. 10 of 2004, the petitioner has averred that it is a partnership firm duly registered under the Sikkim Act and having its registered office at Subba Building, Syari, Gangtok, Sikkim. Respondent No. 1 is the Union of India; respondent No. 2 is the Secretary, Income/Sales Tax Department, Gangtok, who collects income-tax under the Sikkim Act from the residents. Respondents Nos. 3 to 5 are Directors of Income-tax (Investigation) situated at Kolkata, New Delhi and Guwahati, exercising jurisdiction collectively by issuing search warrants on the petitioner and other persons/firms, etc., allegedly connected with one firm M/s. M. S. Associates. It is stated that these authorities had acted in concert on the basis of shared....
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....M/s. M.S. Associates carries on business of selling State organised lotteries. Since September 28, 1993, the said M/s. M. S. Associates was the sole distributor of lotteries organised by the State of Nagaland. In this case also, on different dates in the month of June 1999, namely, 17th to 23rd by different warrants of authorisation issued by respondents Nos. 3 to 5 purportedly acting under section 132 of the Act, the business premises of M/s. M. S. Associates as well as the residence and official premises of persons allegedly associated with this firm including the petitioner-company were searched at Gangtok pursuant to the warrant of authorisation dated June 18, 1999, and the amount of cash, jewellery, investment certificates, fixed deposit receipts and other documents were seized, which is evident from the panchanama dated June 23, 1999. In both these matters, it is averred that the search and seizure operations against M/s. M.S. Associates and the persons allegedly associated with them including the petitioners were made on the basis of a preliminary, draft and unsigned report of the Comptroller and Auditors General of India (hereinafter referred to "the CAG") with regard to....
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....od. Being aggrieved by the issuance of the impugned notice dated February 10 20, 2001, the petitioners preferred two separate writ petitions being Writ Petition (Civil) No. 2890 of 2001 and Writ Petition (Civil) No. 2889 of 2001 before the Gauhati High Court. The Gauhati High Court by orders dated April 21, 2001, was pleased to issue rule and pass orders staying further proceedings pertaining to search and seizure if any against the petitioners and the operation of the impugned notice dated February 20, 2001. In these matters on June 6, 2002, before the Gauhati High Court, one Shri Manjit Singh, Deputy Director of Income-tax (Investigation), Guwahati, who was not the concerned officer filed separate affidavit in opposition and admitted that one of the information in possession of the respondents was the report of the Comptroller and Auditor General and that in the present group of cases including the petitioners no separate satisfaction note is required to be prepared and one satisfaction note is sufficient. The High Court of Gauhati by a common final judgment and order dated May 31, 2004, (M.S. Associates v. Union of India [2004] 270 ITR 117), dismissed both these writ petition....
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....at the executive including the respondents cannot assume jurisdiction and conduct investigation over a matter over which the House or its Committee is investigating. It is stated that in any event the final report of the Public Accounts Committee is binding on the executive. It is further averred that the Comptroller and Auditor General report has become non est in view of the Public Accounts Committee report on March 2002, as the Comptroller and Auditor General report begins and terminates within the walls of the House and is a matter relating to internal procedure of the House. In short, the case of the petitioners is that the respondents cannot rely on the Comptroller and Auditor General report either in full or in part for the purposes of conducting search and seizure operations on the petitioners on the basis that there are some allegations in the said report in respect of the firm, M/s. M.S. Associates, in which one of the directors is related to the petitioners by treating the petitioners as a part of the group of M/s. M.S. Associates. It is further averred that the "information" in the possession of the designated authority was the Comptroller and Auditor General report on ....
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....itiating action under section 132 of the Act was also guided by the Comptroller and Auditor General report which was in his possession prior to the same being laid before the Legislative Assembly of the State of Nagaland in August, 1999. The said Comptroller and Auditor General report was thus part of the information in the possession of the designated authority for the purposes of initiating action under section 132 of the Act and one of the bases for forming the requisite belief. As such, prior to the Comptroller and Auditor General report, being placed on the floor of the Nagaland Legislative Assembly in August 1999, the respondents obtained a copy of the draft and final report of the Comptroller and Auditor General and based on the said Comptroller and Auditor General report and other information, which is not disclosed in the counter affidavit, the concerned officer formed a belief that conditions exist for the purposes of resorting to the provisions of Section 132 of the Act and conducting search and seizure operations on the petitioners. Apart from the Comptroller and Auditor General report, it is stated 15 during arguments that one of the information in the possession of....
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....egislative Assembly, etc., in a civil or a criminal matter and the proceedings before the Legislative Assembly would not be a bar to investigation in any matter. It is further submitted: that as there is no legal or constitutional impediments to the use of the Comptroller and Auditor General report, the action of the respondents cannot be said to be unreasonable or unwarranted. It is further the case of the respondents that they had information other than the Comptroller and Auditor General report and even if the Comptroller and Auditor General report could not be relied upon, the other information was sufficient on the basis of which it can be said that the concerned officer rightly formed the requisite belief and issued the warrants of search and seizure under section 132 of the Act. Thus, the contention of the respondents is that the information can be segregated, i.e., the Comptroller and Auditor General report and "other information" and the warrants of authorisation under section 132 cannot be found fault with if it is based on "other information" even if it were to be held that the Comptroller and Auditor General report cannot be said to be information in the possession of t....
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.... affidavit has not been filed by the persons/authority who had issued the warrants of authorisation and as the formation of belief being a mental satisfaction of the concerned superior officer of the rank as mentioned in section 132 of the Act, it is that officer only who ought to file an affidavit and explain the link between the information in his possession and formation of belief thereon. Further, the affidavit filed on behalf of respondents Nos. 3 to 6 is totally vague and does not disclose as to how there is a live link between the information in the possession of the authority and the formation of the belief on the basis of the information. (e) There is a distinction between unconstitutional and illegal search and in respect of unconstitutional search as in the present case, the documents, property, etc., seized has to be returned. Reliance was placed on CCT v. Ramkishan Shrikishan Jhaver [1967] 66 ITR 664 (SC); AIR 1968 SC 59 (Constitutional Bench-para. 19). The decision reported in Pooran Mal v. Director of Inspection (Investigation) Income-tax [1974] 93 ITR 505 (SC) was sought to be distinguished. Apart from the arguments of the respondents noted hereinabove that th....
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.... not required to pay income-tax under the Act of 1961. It was stated that as such the question of the petitioners being amenable to the provisions of the Act of 1961 does not arise and consequently, the entire search and seizure operations are void, illegal and non est. In this regard, counsel for respondent No. 2, i.e, the Secretary, Income/Sales-tax Department, drew my attention to a communication dated July 19, 2004, of the Central Board of Direct Taxes, Ministry of Finance, North Block, New Delhi, addressed to the Chief Commissioner of Income-tax, Jalpaiguri, West Bengal, for constitution of a committee to resolve the differences between the Government of India and the Government of Sikkim on the implementation of the direct laws in the State of Sikkim. It is further mentioned that the first meeting of the said Committee was held on September 20, 2004, under the chairmanship of Shri Berjender, Member (Investigation), Central Board of Direct Taxes. In the counter affidavit filed by the Government of Sikkim, it is, inter alia, stated in this regard as follows: "Therefore, it is factually incorrect to state that the direct tax laws have already been enforced and implemented in ....
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....o be produced, such books of account, or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then- (A)..... (14)..... after such date in respect of any year." Under section 132 of the Act, it is obligatory that the prescribed authority in consequence of information in his possession has reason to believe that the situation enumerated in either of clauses (a), (b) and (c) exists before issuing the warrant of authorisation. Thus, th....
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....st on the file on the basis of which the authorising officer can have reason to believe. In Dr. Nand Lal Tahiliani v. CIT [1988] 170 ITR 592 (All) wherein the information was that the doctor was having a "roaring practice" and was charging high fees for operations the warrants were quashed and it was held that "information" within the meaning of section 132(1) should be as accurate as possible having reference to the precise assets of a person and not of general nature and that such information should in all probability, lead the authorities to have the unmistaken belief that money, bullion, jewellery or other valuable articles or things pointed out by the informer, would be found in the possession of the person named by the informer. It was further held that before acting upon the information, the source of knowledge of an informer should be fully tested and unless the departmental authorities make themselves doubly sure of the information and the creditworthiness of the informer, they should be loath to act upon the information. It was further held that the word of an informer should not be taken for granted and how and in what manner and from whom the information has been gather....
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.... flow reasonably from anything but information which may be regarded as fairly reliable. Hence, the careful selection of these words by the statute and the drastic nature of the powers necessarily point to a judicial application of the mind to some substantial material by the officer acting with a sense of responsibility." Reports/letters/notes of one Government Department to the income-tax authority cannot be regarded as information for the purposes of section 132 of the Act. Reference is made to Ajit Jain v. Union of India [2000] 242 ITR 302 (Delhi) at pages 309, 311 approved by the apex court in Union of India v. Ajit Jain [2003] 260 ITR 80 wherein a note by the CBI to the income-tax authority was not treated as information. In Coca-Cola Export Corporation v. ITO [1998] 231 ITR 200 (SC), the two letters written by the Government of India to the assessee were not "information" in the possession of the Income-tax Officer. In Vindhya Metal Corporation v. CIT [1985] 156 ITR 233 (All) [DB] at page 242 approved by the apex court in CIT v. Vindhya Metal Corporation [1997] 224 ITR 614 seizure on the information of the Government Railway Police of carrying of Rs. 4 lakhs and above was....
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....ormation of the belief and rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief and the live link or close nexus which should be there between the material before the Income-tax Officer in the present case and the belief which he was to form. Further, in Ganga Saran and Sons P. Ltd. v. ITO [1981] 130 ITR 1 (SC) it was held that the Assessing Officer must have reason to believe which is stronger than the word "satisfied" and that the belief must not be arbitrary and irrational. In Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) it was held that the belief must not be based on mere suspicion but should be based on information. It is further well settled that the courts can interfere if the information is non-existent or irrelevant or the belief is dishonest. In ITO v. Seth Bros. [1969] 74 ITR 836 (SC) it was held that if the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the court. In Vindhya Metal Corporation v. CIT [1985] 156 ITR 233 (All) [DB] at page 239 approved by....
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.... somehow or the other got possession of the said report (as contended by the respondents) by illegal or other means then also the concerned officer could not have used the said report as it was the property of the House. It is not the knowledge of the CAG report, which is relevant but its user for a collateral purpose, which is constitutionally impermissible. It is further submitted that the report of the CAG regarding the working of a Government Department cannot be construed as "information" within the meaning of section 132(1) of the Act. Article 148 of the Constitution of India provides that there shall be a Comptroller and Auditor General of India who shall be appointed by the President. Article 150 provides that the accounts of the Union and the States shall be kept in such form as the President on the advice of the CAG prescribes. Article 151(2) of the Constitution provides that- "151.(2) The reports of the Comptroller and Auditor General of India relating to the accounts of a State shall be submitted to the Governor of the State, who shall cause them to be laid before the Legislature of the State." In the present case, the CAG prepares a report regarding the workin....
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....le 212 provides for presentation of the report of the Committee, which may be either preliminary or final and be signed by the chairman on behalf of the Committee. Rule 214 provides that the chairman shall present the report of the Committee to the Assembly and rule 215 provides for the presentation of the report of the Committee by the Speaker. Rule 216 provides that the Committee shall have power to pass resolutions on matters of procedure and rule 217 provides that the Committee may be with the approval of the Speaker may detail rules or procedure to supplement the provisions contained in the rule. It is thus evident that the CAG report is legislative paper and is the property of the House and its members. The CAG report can only be possessed by the Governor who is required to lay the same before the House. It is the exclusive prerogative of the House and its members to deliberate on the same as the said report falls within the special jurisdiction of the House or its Committee. This being the position, no officer, executive or judiciary can be in legal and/or constitutional possession of the said report. Even if any executive comes into possession of the said report, he cann....
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....CAG reports stand referred to the PAC as soon as they are laid on the Table and the PAC after examining the replies and hearing the evidence given before them by the representatives of the Government come to their own conclusions and report to Parliament. At page 2199, Kashyap further states that certain papers-documents, reports, statements, etc., are laid on the Table of the House to fulfill the requirement of the constitutional provisions. It is further stated that once any paper is laid on the Table of the House, it becomes part of the official records of Parliament. In the present case, the search and seizure was conducted on June 23, 1999, and the CAG report was laid in the House on August 16,1999. As such, even before the CAG report could become "public document", the same was illegally and unconstitutionally used by the concerned officer. Further, at page 2275, Kashyap says that unless the Speaker otherwise permits, papers required to be laid on the Table under a statutory obligation should not be circulated to the members before being so laid. At page 2335, Kashyap says as follows: "(a) No member or officer of the House should give evidence in a court of law in respect ....
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....n submitted to the chairman for approval and a copy thereof is forwarded to the CAG for factual verification. When the PAC sits to consider the draft reports as approved by the chairman, the CAG (in the case of the State, the Accountant-General) is also present at the sitting to point out changes in the facts and figures where necessary. The report of the Committee contains a summary of the main conclusions and recommendations. The report is placed before the House and is discussed on the floor of the House. As such, the respondent-authorities would have no authority or jurisdiction to form a belief on the basis of the said CAG report as in doing so they would be substituting their wisdom with that of the House or its Committee (PAC) and/or, to conduct parallel investigations inasmuch as if the respondents conduct any investigation either in respect of the Government or form a belief in respect of a stranger on the basis of the said CAG report it would be a matter without jurisdiction as it would tantamount to conducting investigation over a matter over which the House or its Committee which has exclusive jurisdiction is investigating. The PAC conducts a review of the report of ....
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.... B.L. Wadhera v. Union of India (C.W.P. No. 1716 of 2000) which was decided on May 16, 2001. In this case, the petitioner had on the basis of the CAG reports asked the respondents to perform their constitutional duty to ensure that all the Ministries/Department submit their respective replies/action taken notes on each paragraph of the CAG report and also sought direction from the respondent to file status report indicating action taken or proposed to be taken on the basis of the irregularities/illegalities, etc., pointed out by the CAG. The issue arose in this case was as to whether the courts can take any action on the basis of the CAG reports. The High Court, inter alia, after considering the constitutional provisions, the provisions of the Act of 1971 and the decided cases held and observed in paras. 9 and 10 as under: "9. ... no court can go into those questions which are within the special jurisdiction of the Legislature itself which has the power to conduct its own business. It was further opined that the Legislature has the jurisdiction to control the publication of its proceedings and to go into the question whether there has been any breach of its privilege, and in thi....
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....urt can go into those questions which are within the special jurisdiction of the Legislature itself which has the power to conduct its own business. It was further opined that the Legislature has the jurisdiction to control the publication of its proceedings and to go into the question whether there has been any breach of its privilege, and in this regard, the Legislature is vested with competent jurisdiction to carry on its proceedings in accordance with its rules of business and mere non-compliance with the rules and procedures cannot be a ground for issuing a writ. In this connection, it was also observed that the courts have always recognised the basic difference between complete want of jurisdiction and improper or irregular exercise of jurisdiction. 10 ... The two aspects regarding the action to be taken in the report and follow up action, if any, are closely interlinked and it would not be desirable to dissect them. It is within the domain of the parliamentary power to work out the modalities and procedures." Thus if courts cannot take any action on the basis of the CAG report then as a corollary the executive cannot also take any action of the CAG reports and as such any....
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....rovisions of the Acts of Parliament, and if it came to a wrong conclusion, this resembled the error of a court whose decision was not subject to appeal. In Stockdale v. Hansard [1839] 9 AD & El 1, it was held that: Lord Denman J.: "Whatever is done within the walls of either assembly must pass without question in any other place." LITTLEDALE J.: "It is said the House of Commons is the sole judge of its own privileges; and so I admit as far as the proceedings in the House and some other things are concerned." Patterson J.: "Beyond all dispute, it is necessary that the proceedings of each House of Parliament should be entirely free and unshackled, that whatever is said or done in either House should not be liable to examination elsewhere." "That the House should have exclusive jurisdiction to regulate the course of its own proceedings, and animadvert upon any conduct there in violation of its rules or derogation from its dignity, stands upon the clearest grounds of necessity." In P.V. Narsimha Rao v. State (CBI/SPE) AIR 1998 SC 2120, the Constitution Bench of the hon'ble Supreme Court while interpreting the expression "in respect of" occurring in article 10....
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....charged and/or has already been discharged by the PAC. The very basis of the formation of a belief and the consequent assumption of jurisdiction under section 132 of the Act disappears as the PAC finds that the entire CAG report is untenable. The respondents could not have formed reason to believe on the basis of the said CAG report for the purposes of initiating action under section 132 of the Act against the petitioners inasmuch as firstly, the possession of the said report is unconstitutional being violative of article 151(2) of the Constitution of India (as on the said date of the possession of the said report, the same being the property of the House was not even laid before the House) and secondly, no belief could be formed on such a report as an inquiry into the same had to be conducted by the House or its Committee (PAC in the present case) being the prerogative of the House or its Committee (PAC). In British Railways Board v. Pickin [1974] AC 765 (HL) the courts had shown an anxiety not to create a conflict between Parliament and the courts. In this case, the Law Lords held as follows: Lord Reid: "For a century or more both Parliament and the courts have been careful....
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.... its own internal concerns practically invested it with a judicial character when it had to apply to particular cases the provisions of the Acts of Parliament, and if it came to a wrong conclusion, this resembled the error of a court whose decision was not subject to appeal. The saying that every wrong has a remedy was demonstrably incorrect; 57 the correct position was that where there was no legal remedy, there was no legal wrong. Bradlaugh v. Gossett [1884] 12 QBD 271 was applied and followed in Dingle v. Associated Newspapers Ltd. [1960] 2 QBD 405 that to impugn the validity of the report of a select committee of the House of Commons, especially one which has been accepted by the House by being printed in the House of Commons Journal was contrary to s. 1, article 9 of the Bills of Rights, 1688, and no such attempt can properly be made outside Parliament. Following this analogy, the executive cannot act on the CAG report as firstly, the CAG report is to be discussed by the House-is to be dealt with by the PAC. Secondly, the report binds the House and thus binds the Government and the executive. Thirdly, if the PAC report were to be binding on the executive, its prior user wou....
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....ion Finance Ministry was to facilitate the same to be laid before the House and not to be used by the Ministry or its officials for collateral investigations or purpose. The obligation of the CAG was to forward his report to the Governor who had to lay it to the House and not to forward it to various Government Departments. Documents received in the Legislative Assembly are routed through the Government or the Executive, does not empower the Government or the Executive to use the papers and documents which fall within the exclusive jurisdiction of the Legislative Assembly to be used for any other purpose. This would tantamount to usurpation of jurisdiction over the matter over which the House has exclusive and special jurisdiction. The question is not of the privilege of the Legislative Assembly or its members and how the privilege is to be invoked but the manner in which the property of the House has to be dealt with under the Rules and Procedures, Practice and Convention of the Legislative Assembly. If the Government officials use documents, etc., which have to be submitted to the House then it would lead to a conflict and undermine the supremacy of the House to deal with its ....
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..... This is what led to the Division Bench of the High Court of Delhi in B.L. Wadhera's case to hold that the CAG reports are within the special and exclusive jurisdiction of the Assembly and the courts cannot issue directions on that basis. In the present case also, a similar situation has arisen. The CAG had made certain allegations against the working of the Directorate of Lotteries of the State of Nagaland and while doing so made certain remarks against M/s. M.S. Associates. The said CAG report, as stated above, was somehow procured by the Department of Income-tax. Based on that information and some other information, warrants of authorisation were issued in June, 1999, and search and seizure operations were carried out against M/s. M.S. Associates and various persons/companies, etc., associated with them. However, the PAC after a detailed scrutiny and examination of the CAG report held in its report in March 2002, that the CAG report is unsustainable. Now based on the initial report, the Department took action-can such action be reversed, if the PAC findings are reversed. If the Department can use the findings of the CAG report, unlike other discussions, etc., with immunity, the....
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....w of Shri M.K. Subba being a newspaper report cannot be relied on for the purposes of initiating action under section 132. According to me, newspaper reports are second hand secondary evidence. I find merit in the contention of the petitioners. The newspaper reports are hearsay evidence and at best second hand secondary evidence and the respondents cannot use the same for any purpose. In the present case, the said newspaper reports were subsequently found to be fake and their genuineness was inquired into by this court and interim orders were passed on November 13, 1998, much prior to the user of the said information by the concerned officer in June 1999 (by paying scant regard to the pendency of the petition and the orders passed by this court). No reliance can be placed on the said newspaper reports. As such, neither on the CAG report nor on the interview of Shri M.K. Subba can reliance be placed, as they do not constitute information and/or evidence and as such no reasons to believe can be formed on the said information, as the same is non-existent. A perusal of the files submitted before me by the respondents during the 65 arguments shows that the respondents did have inform....
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....as seen in "A" of the original file. According to me, the respondents could not be in possession of the CAG report before it was laid before the House and as such could not have used the same for the purposes of forming the requisite belief under section 132 of the Act. As such, the warrants of authorisation dated June 18, 1999, issued by the respondents are illegal and unconstitutional and are hereby set aside and quashed. Consequently, the impugned notice dated February 20, 2001, in the present cases are also hereby set aside and quashed. The respondents have in the counter affidavit stated that the CAG report is not the only basis on which the authorities are alleged to have formed the "reasons to believe" for the purposes of invoking the provisions of section 132 of the Act. Although I have held that the CAG report was given supremacy and led the concerned officer to form the requisite belief, I shall still deal with and dispose of this argument made by the parties. It is well established that if any of the substantial grounds is bad, vague, irrelevant, unconstitutional or extraneous or not existing the whole action is bad and illegal. In Dhirajlal Girdharilal v. CIT [....
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....officer can form a belief even if one ground is relevant and the other being irrelevant or non-existent. The satisfaction of the concerned officer is "subjective satisfaction" as 72 the same is based on the information, i.e., documents, etc., before him and it is after evaluating these documents, etc., that he form a belief. As the satisfaction is subjective the principles laid down in Dhirajlal Girdharilal v. CIT [1954] 26 ITR 736 (SC); AIR 1955 SC 271, at page 273 ; Zora Singh v. J.M. Tandon, AIR 1971 SC 1537 at para. 10 arid Union of India v. Parma Nanda [1989] 75 FJR 168; [1989] 2 SCC 177 at para. 24, are applicable. In these cases, it is held that in a matter of subjective satisfaction where the authority acts on material partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding that such finding is vitiated because of the use of inadmissible material. As such, the fact that the respondents were in possession of other information other than the CAG report would not be of any consequence as I have firstly held that the timing of the possession of the CAG....
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....ivilege. In cases where there was no claim of privilege by the Departments, the courts have held that the information is secret and is not to be shown to the petitioners. In this respect, reference is made in Kamal Khosla v. Director of Income-tax (Investigation) [2002] 258 ITR 43 (Delhi) [DB]; Ram Swamp Sahu v. CIT [1992] 196 ITR 841 (Patna); Kalpaka Bazar v. CIT [1990] 186 ITR 617 (Ker); Dr. Partap Singh v. Director of Enforcement [1985] 155 ITR 166 (SC) wherein it was held that the documents useful for or relevant to investigation or proceedings are secret and need not be disclosed in the search warrant or shown to the petitioners. The next argument of the petitioners is that the counter affidavit filed in 76 the present case is vague and the same is liable to be ignored. Additionally, it is argued that the said affidavit is not filed by the concerned officer who had formed the belief and issued the warrant of authorisation. It is contended that the counter affidavit is filed by one Shri Raju Lepcha-Assistant Director of Income-tax who was not the concerned authority and as such the said affidavit is not admissible and is liable to be ignored. It is submitted that in cases wh....
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....on of belief are important, i.e., date of issuance of warrants under section 132 of Act for authorising the search and seizure operations, but the events subsequent thereto are equally important as any action taken by the respondents pursuant to the CAG report would not only be illegal and unconstitutional but would also undermine the findings of the PAC as the PAC has not accepted the CAG report. As such, not only the impugned action of the respondents would be nullified but also whatever is being retained, i.e, account books, jewellery, etc., pursuant to the impugned action would have to be returned. This is because no belief could be formed on the CAG report once the findings of the said CAG report have not been accepted by the House and/or its committee. To hold otherwise would be to negate the report of the PAC, which is not permissible. Counsel for the petitioners referred to the judgment of the apex court in CCT v. Ramkishan Shrikishan Jhaver [1967] 66 ITR 664; AIR 1968 SC 59 wherein the Constitution Bench of the hon'ble Supreme Court in para. 19, held and observed as under: "It follows therefore that anything recovered from the search of the residential accommodation on ....
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.... search and seizure was illegal. It was contended that the respondents cannot use any evidence obtained in the present case as the search herein is unconstitutional. It was further argued that Pooran Mal's case [1974] 93 ITR 505 (SC) did not consider the earlier law laid down by the Constitution Bench of the apex court in CCT v. Ramkishan Shrikishan Jhaver [1967] 66 ITR 664; AIR 1968 SC 59. The High Court of Calcutta in Bishnu Krishna Shrestha v. Union of India [1987] 168 ITR 815, inter alia, held at pages 840 and 843 as follows: "The principles that were enunciated by the Supreme Court in the case of Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 20 STC 453 ; AIR 1968 SC 59 which were followed by this court in some cases, have not been overruled by the Supreme Court in any subsequent decision .... I am entirely unable to uphold this contention. A court of law does not suffer a wrong to be without a remedy. If a legal wrong has been committed against the petitioner, why should not that be undone by passing an appropriate order. In the case of Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 20 STC 453; AIR 1968 SC 59, this was ....