- (1.) The petitioner has sought following reliefs :- "(i) To call for the records from the respondents for the perusal of the Hon'ble Court for the satisfaction that there were proper reasons to constitute a reason to believe for initiation of search. (ii) That, it may please be held that the search conducted in violation of the procedure as laid down in the Criminal Procedure Code, 1973 renders the search illegal and void and it may please be held that the search was illegal should be quashed. (iii) That, entire search proceedings being illegal and void all subsequent proceedings undertaken by the Commercial Tax Department may please be quashed. (iv) That, a writ of mandamus may kindly be issued directing the respondents to return all the seized documents in possession of the officers of the M.P.V.A.T. Department. (v) That, it may kindly be held that the search carried out by the M.P.V.A.T. Department is illegal and void. (vi) Any other relief considered necessary and expedient under the facts of the case alongwith the cost of this litigation may kindly be allowed to the petitioner." The petitioner has challenged the letter of authorization, issued by respondent no. 2, authorizing the search of premises of petitioner under section 55 of the M.P. Value Added Tax Act, 2002 and the search conducted in the premises on 28.8.2010.
(2.) The aforesaid letter of authorization and search are assailed by the petitioner in this petition on the ground that search of business and residential premises of petitioner Company were made without any valid reasons, illegal authorization and without showing the authorization for search to the persons present at the business premises and residential premises of the Managing Director of petitioner. The search is also assailed on the ground that procedure as laid down under section 100 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C.' for short) was not followed and the entire search, conducted violating the provisions under section 100 of Cr.P.C., vitiates. The petitioner has also raised allegations in respect of behaviour, use of language by the authorized officers, and challenged the same on the grounds, that procedure at the time of conduction of search and seizure was not followed. Engagement of private security personnel, avoiding local police to help the aforesaid persons for the search and seizure is also a ground to challenge the search.
(3.) The facts of the case are : (a) that petitioner is a body Corporate registered under the Companies Act as a limited company and is engaged in the business of mining operations at village Gudri, Tahsil Bahoriband, District Katni. It is having mines at village Pipraud, National Highway No. 7, Katni and processing unit for marbles at Gudri. The Company is having its registered office at E-3, Mangolpuri, Industrial Area, New Delhi and work site at village Bahoriband, District Katni. The petitioner is a registered dealer under the M.P. Value Added Tax, 2002 (hereinafter referred to as 'VAT Act' for short) having TIN No. 23606206423 and is regularly paying the Value Added Tax by filing return to the concerned authority. The petitioner's assessments have been completed upto the assessment period 2007-08. The petitioner was not penalized in the past for any breach of law or default in payment of Commercial Tax. (b) That on 28.8.2010 the team of near about 40 persons under the authorization of respondent no. 2 and headed by respondent no. 3 made entry in the various premises of petitioner. These persons were allowed ingress and were provided facility of inspection of documents, however no authorization letter was shown by the group leader to the person Incharge at various places. (c) During the search, the team collected various documents, papers and stacked in two rooms. The documents were brought by another group of search party from residential bungalow situated at Anand Vihar Colony, Katni, from Unit no. 2 at village Niwas, Unit No. 3 and 4 at Village Pipraud. Some of the documents were stored in 3 boxes and remaining were sealed in two rooms. A request was made on behalf of petitioner to draw a proper panchnama and give receipt of documents which were intended to be taken away by the search parties, stored in 3 boxes, but it was denied by the search party. When insistence was made for issuance of receipt and it was denied then it gave rise to a dispute with the staff present at the site and search party. The staff of the petitioner approached to the Incharge of Police Station Saleemnabad, District Katni made a complaint in respect of non issuance of receipt of documents, which were intended to be taken away from the factory premises. On this information, the T.I., Saleemnabad reached to the site and a letter was handed over to him at 10.30 in the night on 28.8.2010. A copy of the letter is enclosed as Annexure P-1. (d) On the intervention of Incharge of Police Station, Saleemnabad a letter, addressed to the person Incharge to the search party requesting him to give the receipt of boxes those were taken away by the search party, was served, but by putting a note on the same application that no such procedure is provided under section 55 of the VAT Act and the receipt was not issued. A copy of letter dated 28.8.2010 addressed to the Incharge of Enforcement Team along with his reply is filed as Annexure P-2. (e) That the search party was under the leadership of P.K. Singh, Assistant Commissioner of Commercial Tax, Bhopal. The search party was also accompanied by a private security agency belonging to ISF (Indian Security Force, Jabalpur). These persons were dressed in black clothes. Section 55 of the VAT Act does not provide any assistance to such search party of private security forces. Sub-section 7 of section 55 of the VAT Act authorizes the Commercial Tax Officer to take assistance from the local police officers. (f) That during the search and till the aforesaid records were intended to be taken away by the search party, the entire staff was cooperative with the search party. (g) That because of the aforesaid request made by the employees of petitioner to the search party for issuance of receipt, the behaviour of search party changed and the private security force manhandled the staff of petitioner. Derogatory and abusive languages were used by respondent no. 5 with the staff of petitioner. (h) That the procedure as envisaged under section 55 of the VAT Act and section 100 of the Cr.P.C., was not followed. Neither two independent witnesses were called at the time of search, nor panchnama was prepared and no receipt was issued by the search party, which was contrary to the statutory provisions and mandate of section 100 of Cr.P.C. The search party ought Jo have prepared a list of all the documents, properties seized, which should have been duly signed by the independent witnesses, but neither independent witnesses were called nor any search panchnama was prepared. On the contrary when the receipt was asked from the respondents in respect of seized documents, which were intended to be taken away from the factory premises, the respondents denied it and misbehaved and abused with the employees of petitioner, who were present at the time of search and seizure. (i) That under section 55 sub-section 5 of the VAT Act, the rocedure as envisaged under section 100 of Cr.P.C., was to be followed, but the entire provision were given go-bye while conducting search and seizure by the search party. (j) Sub-section (1) of section 55 of the VAT Act specifically provides for recording of reasons by the Commissioner before issuing an authorization for search. The case of petitioner is that no reasons were before the respondent no. 2 to constitute a reasonable belief that petitioner was evading payment of Tax or indulged in evasion of tax to constitute a reason to believe for initiation of search action. (k) That the respondents while conducting the search took the help of private security agents, while under sub-section (7) of section 55 of the VAT Act, it was mandatory on the part of search party to take assistance of local police officers and no where it provides to take help of private security agencies. (l) That the petitioner moved an application before the Commercial Tax Officer, Anti Evasion Bureau, Jabalpur requesting him to inspect the search file, so that petitioner may satisfy itself that the search was conducted under the proper authorization of Commissioner, but no permission was granted, as was prayed by Annexure P-4. On the aforesaid grounds, petitioner has prayed that the uthorization, search and seizure made by the respondents may be declared as illegal and void and the entire proceedings may be quashed.;