COMMISSIONER OF COMMERCIAL TAXES BOARD OF REVENUE MADRAS Vs. RAMKISHAN SHRIKISHAN JHAVER

JUDGEMENT

(1.) THESE five appeals on certificates granted by the Madras High Court raise common questions of law and will be dealt with together. We shall give brief facts in one of the appeals (No. 150 of 1967) arising out of writ petition No. 1321 of 1964 in order to understand the questions that fall to be decided in the present appeals. On 19/08/1964, at about 5.00 p. m. the officers of the Commercial Tax Department (hereinafter referred to as the Department) raided the premises of Zenith Lamps and Electricals Ltd., (hereinafter referred to as the Company). It is said that the premises were searched and a suit-case was seized and forcibly removed by the officers who made the raid in spite of the fact that they were informed that the box did not contain any papers or documents belonging to the Company and its contents consisted merely of personal effects of one of the Managing Directors, namely, Shri Ramkrishan Shrikishan Jhaver. The raid and search were made by the authorities concerned on information that Shri Goenka, one of the Directors of the Company had removed a box containing secret accounts relating to it. The main contention of the petitioner in support of his prayer that the articles seized should be returned to him was under three heads. It was first contended that on a proper construction of S. 41 of the Madras General Sales Tax Act, No. 1 of 1959 (hereinafter referred to as the Act), the officers of the Department had no authority to search the premises and seize either the account books or the goods found therein. Secondly, it was contended that if S. 41 (4) authorised seizure and confiscation of goods, it was beyond the legislative competence of the State Legislature, for it could not be covered by item 54 of list II of the Seventh Schedule to the Constitution relating to "taxes on the sale or purchase of goods". Lastly, it was contended that of various provisions in S. 41 were capable of being construed as authorising search and seizure the provision contained therein were unconstitutional in view of Article 19 (1) (f) and (g) of the Constitution.

(2.) IT is not necessary to refer to the facts in the other petitions which have resulted in the other appeals before this Court because in those cases also there was search and seizure by the officers of the Department and their action is being attacked on the same grounds. All the petitions were opposed on behalf of the State Government and its case was firstly, that S. 41 authorised search and seizure; secondly, that the State Legislature was competent to enact S. 41 (4) under item 54 of List II of the Seventh Schedule to the Constitution and thirdly, that the provisions in question did not offend Art. 19 (1) (f) and (g) of the Constitution and were in any case protected by Article 19 (5) and (6).

(3.) IT will be seen from the above brief review of the provisions of the Act that it mainly deals with sales tax to be levied at the point of first sale in the State though there is also provision for purchase tax in certain cases. IT empowers any officer, empowered by the Government in this behalf, to require any dealer to produce before him the accounts, registers, records and other documents and to furnish any other information relating to his business. IT may be mentioned here that the Government has empowered all officers of the Department not lower in rank than the Assistant Commercial Tax Officer, all officers of the Revenue Department not lower in rank than an Inspector and all officers of the police Department not lower in rank than a Sub-Inspector to act under S. 41, sub-sections (2) to (4). Presumably so far as sub-s. (1) is concerned only officers of the Department can act under the provision. However, there is no dispute with respect to that sub-section as the power has to he exercised for the purpose of the Act i.e., with reference to assessment proceedings at all stages including recovery of tax and prosecution for offences. IT is not disputed that the power under sub-s. (1) can only be exercised to require a dealer to produce accounts etc., relating to his business and not that of anybody else.