DWIVEDI, J. - (1.) THIS Full Bench has been constituted to answer these two questions : (1) Whether section 13(3) of the U.P. Sales Tax Act contravenes articles 14 and 19 of the Constitution ? (2) Whether, even if section 13(3) is ultra vires, any material obtained as a result of the search and seizure effected by the sales tax authorities can be utilised while making an assessment against the petitioner ?
(2.) SECTION 13(3) of the Sales Tax Act (hereinbelow called the Act) reads : "If any officer authorised under sub-section (2) has reasonable grounds for believing that any dealer is trying to evade liability for tax or other dues under this Act, and that anything necessary for the purpose of an investigation into his liability may be found in any account, register or document, he may seize such account, register or document as may be necessary. The officer seizing the account, register or document shall forthwith grant a receipt for the same, and shall be bound to return them to the dealer or the person from whose custody they were seized, within a period of ninety days from the date of such seizure, after having such copies or extracts taken therefrom as may be considered necessary, provided the dealer or the aforesaid person gives a receipt in writing for the account, register or document returned to him. The officer may, before returning the account, register or document, affix his signature and his official seal at one or more places thereon, and in such case the dealer or the aforesaid person will be required to mention in the receipt given by him the number of places where the signature and seal of such officer has been affixed on each account, register or document." The first argument is put in this way : The account, register or documents are the exclusive property of the dealer and this enactment places unreasonable restrictions on his right to hold this property.
(3.) THE need for examination of the nature of the dealer's proprietary right in the account, register or documents mentioned in section 13(3) is evident. The Act contemplates two broad categories of dealers : (1) those who are liable to pay tax, and (2) those who are not liable to pay tax. The first category is sub-divided into (i) licensed dealers and (ii) registered dealers. Section 3-E deals with the licensing of dealers. Sub-section (4) of this section casts an obligation on a licensed dealer "to maintain true and correct accounts of day-to-day transactions of sale and purchase of goods" notified under section 3-D(1) in an intelligible form and in such manner, if any, as may be prescribed." He is also obligated to furnish to the assessing authority the details of the aforesaid transactions and other relevant information connected therewith. Section 8-A provides for registration of dealers who are liable to pay tax. Section 12 provides that every dealer who is liable to pay tax, including a dealer who is exempted from tax on payment of fee under the Act "shall keep and maintain a true and correct account showing the value of the goods sold and bought by him." Where the accounts maintained by him in the ordinary course do not exhibit a true and correct account in an intelligible form, he "shall maintain true and correct account in such form as may be prescribed". ;