- (1.)In these appeals the assail is to the legal tenability of the order dated 3.9.2003 passed by the Division Bench of the High Court of Judicature at Allahabad in Civil Writ Petition No. 275 of 2000 whereby the High Court has quashed the search and seizure conducted on 16.2.2000 in the factory premises of the 1st respondent.
(2.)Filtering the unnecessary details, the facts that constitute the filament of the controversy is that the 1st respondent is engaged in the manufacture of C.I. pipes, fittings and manholes and has obtained the licence under the Central Excise Act. The factory in question has been filing income-tax returns under the Income Tax Act, 1961 (for brevity 'the Act'). On 16.2.2000 when the sole proprietor of the factory Shri Om Prakash Agarwal was absent, the officer of the Income Tax Department conducted a search both at the residential as well as the business premises. During the search of the residential premises, son of the sole proprietor was informed by the Income Tax Officer that the search operations were also being conducted at the factory premises. Despite such information he was not allowed to leave the house. Assailing the search and the seizure, the 1st respondent preferred a writ petition before the High Court and contended therein that there was no information in possession of the officer which could have persuaded any reasonable person to form an opinion about the existence of undisclosed assets of the writ-petitioner. It is further urged that the warrant of authorization was issued mechanically, arbitrarily and there was total non-application of mind and moreover there was no formation of opinion about the existence of undisclosed assets as contemplated under Section 132(1) of the Act. On this foundation, the search and seizure were sought to be quashed.
(3.)A counter affidavit was filed by the revenue asseverating that there was no illegality in the initiation of the seizure and it had been conducted in accordance with law and the revenue had enough material against the 1st respondent herein for the assessee had suppressed the vital information pertaining to production and sale and the same was also evidenced during the search operation. It was contended that the productions declared by the 1st respondent in the official record was not even 1/5th of the actual production revealed by the seized documents.