R.N. Misra, J.
1. The petitioner is a firm registered under the Indian Partnership Act and is a dealer in petrol, high speed diesel and light diesel products and kerosene oil. It receives supplies from the Indian Oil Corporation and has been registered as a wholesale distributor under the Orissa Motor Spirit (Taxation on Sales) Act, 1946 (hereinafter referred to as the Act). A certificate of registration under Section 7 of the Act had been granted to it. On 16th June, 1970, an Assistant Commercial Tax Officer attached to the Intelligence Wing at Berhampur (opposite party No. 4) visited the petrol station. It is alleged on behalf of the petitioner that both the partners were absent at the relevant time and a watchman was in actual charge at the spot. A younger brother of the partners was in the office close-by. It is alleged that opposite party No. 4 was allowed to enter into the premises and inspect the books of accounts in the manner he liked; yet a report was made by opposite party No. 4 both to the local police as also to the Commercial Tax Officer that while opposite party No. 4 tried to seize some of the accounts of the petitioner-firm he was resisted. A proceeding was initiated against the petitioner for cancellation of the registration on the allegation that the provisions of Section 8(2) of the Act and Rule 17(f) made thereunder had been violated. Reliance was placed in support of the allegation of opposite party No. 4 on a statement of one Choudlmry Babu Patra who is said to have come to the place and witnessed the resistance offered to seizure. Before the Commercial Tax Officer in the proceeding on behalf of the petitioner all the allegations contained in the report of opposite party No. 4 had been denied. A prayer was made to produce the witness who supported the report for cross-examination. Ultimately, the Commercial Tax Officer (opposite party No. 3) directed the cancellation of the registration. An appeal was carried to the Assistant Commissioner (opposite party No. 1), who sustained the order of cancellation. He was of the view that it was not necessary to produce the witness for cross-examination. He was also of the view that opposite party No. 4 had jurisdiction to inspect and seize the accounts. It is against this appellate order that the present writ application has been filed.
2. Mr. Mohanty raised initially three contentions:
(1) That opposite party No. 4 had no power of seizure as there was no provision to seize under the Act;
(2) That in the absence of special authorisation, opposite party No. 4 was not competent to act as a Commercial Tax Officer under the statute; and
(3) That there was violation of principles of natural justice inasmuch as the evidence of the witness was utilised though in spite of the prayer of the petitioner he was not offered for cross-examination so that the evidence could be tested.
Mr. Mohanty, subsequently, did not press his contention regarding special authorisation in view of the definition of 'Commercial Tax Officer' in Section 2(a-2) of the Act. Indisputably, opposite party No. 4 had been appointed to discharge the functions of a Commercial Tax Officer under the provisions of the Orissa Sales Tax Act and, therefore, automatically became a Commercial Tax Officer for the purposes of the 1946 Act.
3. The learned standing counsel does not dispute the fact that under the Act there is no power of seizure of documents. He, however, contended that though the action of opposite party No. 4 has been described even by himself and others as seizure, all that was really intended was inspection.
4. Two questions, therefore, really arise for consideration, namely, as to whether what was attempted by opposite party No. 4 that afternoon was inspection or seizure of the documents and as to whether there has been failure to comply with the rules of natural justice because the witness had not been produced for confrontation.
5. The two contemporaneous reports are on the record. The first one is by opposite party No. 4 to the officer-in-charge of the Berhampur Taluk Police Station and it is dated 16th June, 1970. Therein it has been stated:
Then as per the provision of law, I wanted to seize these five note books and the written loose papers. But I was obstructed by the person-in-charge along with the younger brother of the owner.
On the following day opposite party No. 4 made a report to the Commercial Tax Officer of the Intelligence Wing, Berhampur (annexure C). Therein it has been stated:
After awaiting a period of four hours and without getting the regular books of accounts, I wanted to seise those documents. I was obstructed by the person-in-charge of the petrol pump and the brother of the firm(?) in seizing the documents.
In the notice issued to the petitioner for showing cause it has been said (annexure):
It is further reported that the said person-in-charge and your younger brother obstructed the Assistant Commercial Tax Officer (Intelligence Wing) from seizing the five note books and the written loose papers.
In his appellate order, opposite party No. 1 in paragraph 4 has stated:
The Commercial Tax Officer waited there up to 5 p.m. When he wanted to seize the five note books and loose sheets containing alleged information of the appellant's clandestine dealings in petrol and K. oil, he was obstructed to do so by the person-in-charge of the petrol pump assisted by one of the brothers of the appellant.
Even in the counter-affidavit of opposite party No. 4 in paragraph 9, it has been stated:
That in reply to the averments made in para 7 of the writ application the deponent begs to state that the Assistant Commercial Tax Officer, Intelligence Wing, Berhampur (opposite party No. 4 in the writ application) being lawfully empowered under Section 15 of the Orissa Motor Spirit (Taxation on Sales) Act, 1946, read with Rule 33 of the Orissa Motor Spirit (Taxation on Sales) Rules, 1947, to enter, search, seize and inspect the stock of motor spirit and any accounts, registers, etc., paid a visit to the petrol pump of the petitioner on 16th June, 1970, at 1.30 p.m., for the purpose of inspection of the petitioner's accounts, registers and the stock of motor spirit.
In view of the concession of the learned standing counsel that seizure can only be of motor spirit or any other article which is liable to confiscation under this Act (and accounts are not liable to confiscation), it is clear that opposite party No. 4 was in fact trying to seize the accounts. The learned standing counsel tried to explain away the action of opposite party No. 4 as one to attempt for inspection. We are afraid it would be difficult in view of the materials on record to treat this as a mere attempt for inspection of the documents.
6. In view of our finding that opposite party No. 4 had really attempted to seize the records it is not necessary to refer at any length to a decision relied upon by the learned standing counsel reported in P.K. Adimoolam Chettiar, In re [1957] 8 S.T.C. 741. We conclude by holding that resistance against seizure which is not authorised cannot be taken to be a breach under Section 8(1)(b) of the Act read with Rule 17 of the Rules. Once the finding is that opposite party No. 4 was trying to seize the records without authority of law, the petitioner or his men were entitled to resist such illegal action.
7. The next question for consideration is as to whether the petitioner was entitled to have confrontation of the witness whose statement had been relied upon. We do not have the original order of cancellation of registration. Neither side has produced it. In the appellate order, however, it has been indicated that it was not necessary for the department to produce the witness for confrontation.
8. The learned standing counsel relies upon the allegation made in the counter-affidavit that notices were issued to the witness to appear for cross-examination. He, however, did not comply with the notices of the original authority. There is no indication that at the appellate stage any such attempt was made. In the view the appellate authority adopted in the matter, there was no scope for him to make any attempt to get the witness for confrontation. Admittedly, the statement has been utilised against the petitioner and though the appellate authority has mentioned about it, we are not in a position to hold that on the bare report of the officer the registration would have been cancelled. The corroborative material available from the witness's statement has indeed been utilised, and to what extent it has been depended upon, it is very difficult for us to find out,
9. The learned standing counsel emphatically contended that since rules of natural justice are not embodied rules and since there is no provision in the Act to enforce attendance of a witness, once attempts were made to get the witness for confrontation and his attendance could not be secured, the requirements of natural justice must be held to have been satisfied. We are afraid the submission of the learned standing counsel cannot be accepted. Because of any deficiency in the law, the assessee cannot be prejudiced and in the particular facts of the case if the statement was to be used it had got to be tested by cross-examination. This is not an assessment proceeding. It is in the nature of a penal provision. A registration granted to the petitioner is being cancelled. Therefore, the ordinary law has to apply. The Evidence Act must be followed and the consequence being very serious the petitioner must be given reasonable opportunity of placing the materials before the appropriate authority. It is interesting to note that there has been an affidavit taken from the witness wherein he has denied what he is said to have stated to opposite party No. 4 in support of the report of that opposite party. In this view of the matter we are not prepared to agree with the stand of the revenue as espoused by the learned standing counsel that the requirements of natural justice must be taken to have been complied with.
10. We accordingly allow the writ application with costs, declare that the cancellation of registration is illegal and quash the order of the appellate authority by which the original order of cancellation of registration of the petitioner has been upheld. Hearing fee of Rs. 100 (one hundred) to be realised from opposite parties Nos. 3 and 4 only.
K.B. Panda, J.
16. I agree.