Judgment:
1. The two cases in RN-178 of 1997 and RN-179 of 1997 are taken up together as the issues involved in these two cases are similar and the incident of search and seizure of books of accounts and documents from the residence of the partners of the two applicant-firms in the two cases relate to the same event which took place on November 1, 1995 at 13, Jatindra Mohan Avenue, Calcutta-700 006.
2. The case of the applicants in RN-178 of 1997 and RN-179 of 1997 is that the applicants are firms registered under the Indian Partnership Act, 1932 and carry on business, inter alia, of reselling gold and silver ornaments. They also sell silver utensils and sometimes purchase old gold and silver ornaments and out of the same make new gold and silver ornaments and silver utensils. The firms are duly registered as dealers under the West Bengal Sales Tax Act, 1994.
3. (a) On November 1, 1995 some persons alleged to be Inspectors of Commercial Taxes, Bureau of Investigation, visited the place of business of the applicant of RN-178 of 1997 at 12B, Russell Street, Calcutta-16. They took out various books of accounts and records, prepared a seizure receipt and handed over the same to Shri Sheo Prakash Bhatter, one of the partners of the firm and informed him that the said books of accounts and records have been seized by them as they had reasons to suspect that the applicant-firm was attempting to evade payment of tax under the 1994 Act. After the seizure list was prepared and handed over to the applicant, they made certain notes in separate papers. But Shri Sheo Prakash Bhatter, to whom the seizure receipt was handed over, was not allowed to read the said papers.
(b) On November 1, 1995 some persons alleged to be Inspectors of Commercial Taxes, Bureau of Investigation, visited the business place of the applicant of RN-179 of 1997 at 23A, Kalakar Street, Calcutta-7.
They took out various books of accounts and records of the applicant, prepared a seizure receipt and handed over the same to Shri Om Prakash Bhatter, one of the partners of the firm and informed him that the said books of accounts and the records had been seized by them as they had reason to suspect that the applicant was attempting to evade payment of tax under the 1994 Act. After the seizure list was prepared and handed over to the applicant, the said persons made certain notes in separate papers and Shri Om Prakash Bhatter was not allowed to read the said papers.
4. On the same day, i.e., on November 1, 1995, the said persons visited the residence of Shri Sheo Prakash Bhatter, applicant in RN-178 of 1997 and Shri Om Prakash Bhatter, applicant in RN-179 of 1997 and seized various records from their residence situated at 13, Jatindra Mohan Avenue, Calcutta-6. They were seized from the residence on the alleged ground that the applicants were attempting to evade payment of tax under the 1994 Act. The officers forcibly and illegally seized the said records in spite of the protests of Shri Sheo Prakash Bhatter and Shri Om Prakash Bhatter and after preparing the seizure receipt handed over the same to Shri Shiv Kumar Bhatter.
5. After the seizure the Assistant Commissioner, Commercial Taxes, Bureau of Investigation from time to time issued notices to the applicant in RN-178 of 1997 under Section 65 of the 1994 Act to produce various books of accounts and documents relating to the business of the applicant for the periods 1994-95 and 1995-96. The applicant appeared and produced various books of accounts and documents in pursuance of the said notices. The investigation in respect of the seized books of accounts and documents is still going on in respect of the applicant in RN-178 of 1997. Similar notices were issued to the applicant in RN-179 of 1997 also and they also produced books of accounts and documents as directed. On October 1, 1996, the Assistant Commissioner, Bureau of Investigation seized the various books of accounts and documents in the course of investigation of the already seized books of accounts and documents, when produced by the applicant in RN-179 of 1997 on the same date. In the seizure receipt which was prepared by respondent No. 2 it was alleged that the applicant was attempting to evade payment of tax under the 1941 Act and accordingly the books of accounts and documents were seized for the purpose of taking action under the provisions of the 1941 Act.
6. Respondent No. 2 sought for sanction for retention of the seized records in both the cases from respondent No. 3 till October 30, 1997.
Respondent No. 3 accorded sanction in both the cases for retention of the seized records made on November 1, 1995 till October 30, 1997 by orders dated October 9, 1996 relying upon the grounds stated by respondent No. 2 in seeking sanction for retention of the seized records.
7. The applicants have challenged the seizure of books of accounts and documents from the business places at 12B, Russell Street in RN-178 of 1997 and 23A, Kalakar Street in RN-179 of 1997. They have also challenged the seizure of books of accounts and documents from the residence of the partners by respondent No. 1 on November 1, 1995. In RN-179 of 1997 the applicants have also challenged the seizure of books of accounts and documents in the office of the Bureau of Investigation on October 1, 1996. They have further challenged the orders dated October 9, 1996 passed by respondent No. 3 according sanction for retention of the seized records till October 30, 1997 in RN-178 of 1997 and RN-179 of 1997.
8. The case of the respondents is that the Special Officer, Bureau of Investigation, received an allegation from a secret source that the applicant-dealers had been attempting to evade sales tax by suppressing turnover of sales by maintaining secret books of accounts and records at the places of business as well as at the residence of the partners.
This information was passed on by the Special Officer to the Assistant Commissioner, Commercial Taxes who, in turn, brought the matter to the notice of a team of Inspectors for conducting an enquiry and processing it into intelligence. On processing the information, the Inspectors concerned found elements of truth in the allegation and decided to pay a surprise visit to the places of business at 12B, Russell Street, Calcutta-16 and 23A, Kalakar Street, Calcutta-7 and also to the residence of the partners at 13, Jatindra Mohan Avenue, Calcutta 6.
9. (a) On examination of the records produced at the place of business at 12B, Russell Street, Calcutta-16, by the partner Shri Sheo Prakash Bhatter, on November 1, 1995 Shri M.K. Mukherjee, Inspector of Commercial Taxes, Bureau of Investigation found a lot of discrepancies in the records of the applicant which the said partner failed to explain in spite of being given adequate opportunity to do so. The discrepancies were of such nature that Shri M.K. Mukherjee had enough reasons to suspect that the applicant had been attempting to evade payment of sales tax. These discrepancies were duly recorded by him in the report drawn by him prior to the seizure made on November 1, 1995.
This report was countersigned on all pages by Shri Sheo Prakash Bhatter.
(b) Inspectors of Commercial Taxes, Bureau of Investigation, visited the place of business at 23A, Kalakar Street, Calcutta-7 after disclosing their identities. Shri Om Prakash Bhatter, one of the partners was present at the time of visit and he produced the books of accounts and business records before Shri R.P. Mondal, Inspector of Commercial Taxes. In the course of inspection of the said books of accounts and business records by Shri Mondal, Inspector of Commercial Taxes, certain discrepancies were detected by him which were duly recorded in the report drawn by him prior to seizure made on November 1, 1995. The report recorded the matters on the basis of which Shri Mondal formed his opinion that the applicant was attempting to evade payment of taxes. The report was drawn first and then Shri Mondal proceeded to seize the books of accounts and records. The report is countersigned by Shri Om Prakash Bhatter in each page thereof.
10. In the residence also the business records produced on behalf of the applicants showed evidence of attempt on the part of the applicants to evade tax. Shri A. Mukherjee, Inspector of Commercial Taxes, who examined the business records had reasons to suspect that the applicants were attempting to evade payment of tax, after the representative of the applicant had failed to explain the discrepancies in spite of being granted reasonable time and opportunity. Shri A.Mukherjee recorded in detail the reasons for formation of his suspicion and thereafter seized the records as noted in the seizure list. It is denied that the seizure of records was made at the residence of the partners in the face of protest by the partner. The seizure was made in accordance with law after recording the reasons in the report which was countersigned on behalf of the dealer in every page thereof.
11. The records seized on October 1, 1996 by respondent No. 2 in his office were seized because these records, which were the basis of the returns submitted by the applicant in RN-179 of 1997 in respect of the year 1994-95 showed much lesser sales than those recorded in the records already seized from the residence and the seizure of the records was necessary to deter mine the extent of evasion of tax by the applicant in 1994-95. The seizure which took place in the office of respondent No. 2 was of records relating to the year 1994-95 alone. The relevant seizure report was prepared before the seizure and the same was shown to the applicant's representative Shri Pawan Kumar Agarwal who put his signature thereon.
12. Despite non-co-operation from the applicants in the matter of explanation of the seized records, respondent No. 2, the Investigating Officer has, it is alleged, unearthed mammoth evasion of tax by the applicants. On the basis of such examination, it is claimed, that the total turnover of the applicant-dealer in RN-178 of 1997 as per the seized books of accounts was Rs. 325.33 lakhs up to October 20, 1996 in the year 1995-96 while the turnover disclosed as per returns up to October 31, 1996 was only Rs. 37.49 lakhs. Similarly, for the year 1994-95, the turnover disclosed as per the sales tax account register of the applicant-dealer in RN-179 of 1997 was Rs. 41.38 lakhs whereas the turnover which was not disclosed amounts to Rs. 1,221.19 lakhs.
13. It is submitted that the seized records were not only numerous but also abundantly incriminatory. Difficulty in examining these records came to be further compounded because of utter non-co-operation from the applicants. Hence, respondent No. 3 was approached by respondent No. 2 for sanction of retention of the records in both the cases up to October 30, 1997. Respondent No. 3 after inspecting the records and considering all facts and circumstances involved in the matter issued notices to the dealers asking them to show cause why the seized records would not be retained up to October 30, 1997 for the purpose of the investigation. On October 1, 1996, the learned advocate representing the applicants appeared and filed letters from the partners which stated that they had no objection to the retention of the records up to October 30, 1997. There was oral pleading also to the identical effect by the learned advocate and accordingly respondent No. 3, after considering the matter, allowed the records to be retained in both the cases up to October 30, 1997. The order of respondent No. 3 was passed in the file on October 1, 1996 ; the learned advocate was informed of the order in token of which he countersigned the said order.
Thereafter, the formal order was signed by respondent No. 3 on October 9, 1996 and communicated to the applicants.
14. The allegation that Rule 207 of the West Bengal Sales Tax Rules, 1995 was not complied with, it is submitted, is not correct. There was one witness in the case of each seizure from the places of business and there was one witness in the case of seizure from the residence also.
This would be evident from the seizure receipts themselves. It would also be seen from the reason recorded on October 1, 1996 in connection with the seizure at the Bureau of Investigation that since the seizure was being made in the office at a belated hour no independent witnesses were available. This indicates substantial compliance with Rule 207 of the 1995 Rules.
15. In their affidavit-in-reply, the applicants have generally reiterated their case and have further submitted that since the seizure of the books of accounts and documents were made on November 1, 1995, the respondents are required to show that there were attempts to evade payment of tax by the applicant prior to that date, and the respondents cannot try to justify their action by taking into consideration transactions made after the date of seizure. They have further mentioned that at the time of allowing the retention orders in respect of seizure of books of accounts and documents on November 1, 1995, respondent No. 3 did not at all consider why records seized one year ago could not be examined within a period of one year. Respondent No. 3 being the highest authority under the statute did not apply his own mind before according sanction till October 30, 1997.
16. Mr. Chakraborty, learned advocate for the applicants, has argued in both the cases that affidavits affirmed by Mr. A.R. Mia, Assistant Commissioner of Commercial Taxes, Bureau of Investigation, who was the respondent No. 2 in both the cases cannot be taken into consideration as the same was affirmed by Mr. Mia although he had no personal knowledge of the circumstances affirmed in the affidavit. He has argued that the state of mind of the officers who conducted seizures in the places of business of the applicant-dealers as well as in the residence of the partners cannot be affirmed by Mr. Mia as he was not present during the course of these seizures ; and therefore, could not have any personal knowledge of the same. He has referred to the decisions in the cases of Gazi Khan v. State of Rajasthan AIR 1990 SC 1361 and Shiva Lal v. Income-tax Officer [1970] 77 ITR 999 (Cal), in support of his contention. However, the circumstances in these two cases were clearly distinguishable from those of the instant cases. In the case of Gazi Khan AIR 1990 SC 1361, it was a case of detention under the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act.
There was an allegation of delay of disposal of a represen tation of the petitioner. The representation of the detenu was placed before the Assistant Secretary who called for comments of the District Magistrate.
The Assistant Secretary put up a note incorporating the comments of the District Magistrate to the Deputy Secretary and thereafter on the recommendation of the Special Secretary (Home), the representation was rejected. Before the court a reply was filed by the Deputy Superintendent of Police, Jaisalmer, stating that he was appointed as officer-in-charge in this case. The perusal of the affidavit showed that the Deputy Superintendent of Police spoke on behalf of the detaining authority, namely, the State Government as well as the authorities who dealt with the representation, viz., the Assistant Secretary and the Special Secretary (Home Department). The court asked the learned counsel for the respondent to explain as to under what authority the Deputy Superintendent of Police had arrogated himself to the knowledge of the entire file relating to the impugned order and pleaded for the detaining authority and other authorities who subsequently dealt with the file. The learned counsel took an adjournment and then filed an additional affidavit sworn by the Commissioner and Secretary (Home Department). In that additional affidavit no explanation was given to the query of the court. It is in these circumstances that the court held that this practice of allowing a police officer who has not dealt with the case at any point of time at any level and who in the very nature of the case could not have any personal knowledge of the proceedings, to swear a counter and reply affidavit on behalf of the appropriate authorities should be highly deprecated and condemned and the counter and reply affidavits sworn by such officer merit nothing but rejection. It is clear that in the instant case the circumstances are completely different. Mr. Saha has argued that the officer swearing the affidavit is an officer senior to the officers who had conducted the seizures and was the co-ordinating officer in the investigation. Mr. Chakraborty has submitted that there is nothing on the record to show that the Assistant Commissioner was actually connected with the investigation of the cases. From the records however, it is clear that the officer concerned, namely, Mr.
A.R. Mia, Assistant Commissioner of Commercial Taxes, Bureau of Investigation, was intimately connected with the investigation. It will be seen from the annexures to the applications that Mr. Mia had sent letters to the partners regarding the seizure of records on November 1, 1995. For example in RN-178 of 1997, by memo No. 1753BI dated July 3, 1996 and memo No. 10184BI dated November 20, 1995 he has asked the partners of Bhatters to produce books of accounts relating to the seizure on November 1, 1995. The letter dated November 20, 1995, relates to seizure of the books of accounts of the, partner carrying on business under the trade name of Bhatters and refers to the seizures of the books at 12B, Russell Street, Calcutta-16, 23A, Kalakar Street, Calcutta-7 and 13, J.M. Avenue, Calcutta-6. Similarly, Mr. Mia is, once again, the officer issuing memo No. 2381BI dated September 17, 1996 to the partner of Bhatters fixing the date of hearing in respect of seizures of books of accounts from the residence at 13, Jatindra Mohan Avenue. Similarly, in RN-179 of 1997, it is Mr. Mia who has directed Shri Om Prakash Bhatter of Bhatter and Co., by memo No. I151BI dated May 17, 1996 to appear personally before him in his office for a hearing. By memo No. 10921BI dated December 22, 1995 Mr. Mia has informed Shri Om Prakash Bhatter of Bhatter and Co., at 23A, Kalakar Street, regarding adjournment of the hearing in the matter as per Shri Bhatter's prayer. Memo No. 10183BI dated November 20, 1995 again shows Mr. Mia directing Shri Om Prakash Bhatter of Bhatter and Co. to produce some books of accounts and documents in connection with the seizures at 23A, Kalakar Street, Calcutta-7 and 13, Jatindra Mohan Avenue, Calcutta. The seizure of the books of accounts took place on October 1, 1996 in the office of Mr. A.R. Mia, Assistant Commissioner of Commercial Taxes, Bureau of Investigation. From the recorded reasons it is clear that on that date the books of accounts were produced before Mr. Mia. It would be evident from this that Mr. Chakra-borty's submission that Mr. Mia was not connected in any way with the investigation of the case cannot be accepted. Hence, Mr. Mia's position in the instant case is not at all similar to the position of the Deputy Superintendent of Police in the case of Gazi Khan AIR 1990 SC 1361. The facts in the case of Shiva Lal [1970] 77 ITR 999 (Cal), relied on by Mr. Chakra-borty also are distinguishable from the instant case. In that case the assessee under the Income-tax Act, 1922, specifically alleged that the relevant and material facts had been disclosed to the assessing officer. But the allegations in the affidavit were denied by an officer who was neither the original assessing officer nor the officer who issued the notice. Moreover, the learned advocate for the Revenue was unable to refer the court to any part of the records from which it could be concluded that there was any omission or failure on the part of the assessee to disclose the material facts. In the circumstances, it was held by the High Court that denial by officers who had no knowledge of the proceedings is of no effect. In the instant case all relevant records were made available to the Tribunal. Hence, there is no reason to hold that the ratio of the two judgments cited by Mr. Chakraborty is of any assistance to the applicants and there is no reason why the affidavit of respondent No. 2 cannot be considered to be of any evidentiary value. Two supplementary affidavits have been affirmed by the Inspectors conducting the search and seizure operations at the business premises at 12B, Russel Street and 23A, Kalakar Street and the residence at 13, Jatindra Mohan Avenue. Revenue has also produced the reasons recorded by Shri M.K. Mukherjee, Inspector of Commercial Taxes, Bureau of Investigation, dated November 1, 1995 in respect of the search and seizure operations at 12B, Russell Street and the reasons recorded by Mr. A.R. Mia regarding the seizure of the books of accounts at the office of the Bureau of Investigation on October 1, 1996. These documents do have evidentiary value and cannot be overlooked. Mr. Chakraborty has resisted the production of these records on the ground that they were not annexed to the affidavit-in-opposition. But Mr. Saha, learned advocate for the respondents has pointed out that by production of the original records the respondents have fulfilled their obligation of producing the contemporaneous recordings by the concerned officers in accordance with the submissions made by them in their affidavit-in-opposition in course of which leave for production of these records had been sought. Mr.
Saha further submitted that while the supplementary affidavits of Shri A. Mukherjee and Shri Amalendu Dhar are affidavits by persons who actually took part in the seizure operations production of relevant records and proceedings was a satisfactory means of explaining before the court how the officers conducting the search and seizure formed their opinion or reason to believe or suspect and he further submitted that absence of affidavit of all those officers who took part does not, in the circumstances of this case vitiate the operations on the ground that the condition precedent has not been established. The records of proceedings which were produced at the time of hearing contained contemporaneous recordings by the concerned officer. In support of his contention Mr. Saha cited the decision in the case of Khinw Karan Doshi [1994] 94 STC 298 (WBTT). We are of the opinion that the submission of Mr. Saha on this point is reasonable and that there is no reason why the reasons recorded by Shri M.K. Mukherjee regarding the search and seizure operations at 12B, Russell Street and the reasons recorded by Mr. A.R. Mia regarding the seizure at the office of the Bureau of Investigation on October 1, 1996 should not be taken into consideration by us. We are also of the opinion that the affidavits sworn by Mr. A.R.Mia are affidavits sworn by a competent person in the circumstances of the case.
17. The seizure of books of accounts from the places of business at 23A, Kalakar Street, Calcutta-7 (in RN-179 of 1997) and 12B, Russell Street, Calcutta-16 (in RN 178 of 1997) have been challenged by Mr.
Chakraborty on the ground that no reasons were recorded prior to seizure and whatever have been recorded were not reasons in the eye of law as the alleged recorded reasons were irrelevant and perverse. The officers, he alleged, have not indicated clearly how they came to form an opinion that there was any attempt on the part of the dealer to evade tax. As far as the seizure of documents dated October 1, 1996 in the office of the Bureau of Investigation is concerned, Mr. Chakraborty has argued that no reasons were apparently recorded at all. The report of the seizure at the residence (13, Jatindra Mohan Avenue) does not indicate any details and according to him the report does not show that there was any reason to suspect evasion of taxes.
18. The recorded reasons for the seizure at 23A, Kalakar Street, have been annexed to the supplementary affidavit of Amalendu Dhar, Inspector of Commercial Taxes, Bureau of Investigation. In this report some specific discrepancies have been mentioned. The Inspector has clearly indicated that there were cases of purchases from unregistered dealers which had not been disclosed in annexure "P" of the return for the relevant period. It is seen from the report that the dealer made purchase of gold old ornaments to the tune of Rs. 1,31,265 through purchase voucher No. 170 dated June 29, 1994. The weight of the ornaments has been mentioned as 291.700 gram. It has also been observed that Annexure "P" for quarter ending June, 1994 submitted at the office of the A.C.C.T./P.B. on July 14, 1994 showed purchase as "Nil".
Similarly, during the period July 1, 1995 to September 30, 1995 purchase worth Rs. 63,823 were detected in the available records while annexure "P" for quarter ending September, 1995 showed Rs. 22,056 as purchase made during the period July 1, 1995 to September 30, 1995.
Again from the Rokar book for the year 1995-96 it was found that Rs. 1,35,000 has been deposited at U.B.I., Kalakar Street Branch, on August 10, 1995. It was reportedly stated by Mr. Om Prakash Bhatter that this amount was obtained as loan received from one Bhupesh Kumar Sharma. It is further found from the report that Mr. Om Prakash Bhatter could not explain the irregularities although he was given ample time to explain the irregularities. He also failed to produce any loan confirmation certificate from Bhupesh Kumar Sharma and also failed to produce books of accounts for the year 1994-95 and previous years stating that these are lying with their part-time accountant. The officer has recorded that under the circumstances he had reasons to suspect that the dealer was attempting to evade payments of sales tax. We fail to understand why such suspicion should be considered to be unreasonable or perverse.
Mr. Chakraborty had argued that the purchase of gold old ornaments has not been shown in the return for quarter ending June, 1994 as the ornaments were of 22 carat quality and, therefore, was of 91.6 per cent purity. Since gold of purity above 90 per cent was not taxable such ornaments were not liable to tax and therefore there was nothing improper in non-declaration of this purchase in the return. Mr. Saha has argued that the exemption from payment of tax applies to gold of 90 per cent purity and above but that does not mean that gold ornaments of 22 carat are exempted from taxation. He submitted that in sales tax laws "gold" means gold of a fineness not below 90 percentum while "gold ornament" means ornament meant for personal adornment made or manufactured from gold and not set with stones or gems, whether real or artificial, or with pearls, whether real or cultured. Therefore, Mr.
Saha argued, what has been purchased by the dealer from unregistered dealers was subject to taxation and omission to report it in the quarterly returns was definitely an attempt at evasion of taxes. Mr.
Chakraborty has argued that in the past the dealer has never been assessed to taxation for purchase of old gold ornaments and hence non-declaration of the item in the returns does not show that he had any intention to evade taxes. It is not apparent from the records available before us whether the assessing authority was at any earlier time informed by the dealer about his having purchased gold ornaments or had detected any such purchase without the assessing authority imposing tax on him. But even if such has been the case this cannot result in the suspicion of the officer recording the reasons regarding evasion of taxes by the dealer to be perverse or without basis in fact.
Mr. Chakraborty, has also stated that a loan is not always accompanied by loan confirmation certificates in the records of the firm. But it appears from the report that although ample time had been given to him Mr. Om Prakash Bhatter could not offer any satisfactory reply. While a loan confirmation certificate may not be available some other form of explanation or confirmation should have been submitted by Mr. Bhatter which, according to the officer, was not available from Mr. Bhatter.
Similarly, the discrepancy between the volume of purchase from unregistered dealers revealed in the books of accounts during the period July 1, 1995 to September 30, 1995 and the amount shown in the annexure "P" for the quarter ending September, 1995 was also, according to the Inspector, not explained by Mr. Bhatter. It cannot be said that such discrepancy cannot form the basis of a reasonable suspicion on the mind of the officer.
19. Mr. Chakraborty has argued that although the officer has recorded that he has reasons to suspect that the dealer is attempting to evade payment of sales tax, there is no recital to the effect that therefore he is proceeding to seize the books of accounts and according to Mr.
Chakraborty, this shows that the recorded reasons were not recorded prior to the seizure. This is a conclusion with which it is difficult to agree. The presence or absence of certain words or phrases in a document is not necessarily definitive about the time of its origin.
The records have to be read in their entirety and if that is done it would be seen that the recorded reasons indicate that under the circumstances reported in the recorded reasons the concerned authority had formed the mental state that there were reasons to suspect that the dealer was attempting to evade payments of sales tax. The seizure receipt which was granted shows that because the officer had reason to suspect that the dealer was attempting to evade payment of tax, he seized the books of accounts and records of the dealer. If these two documents are taken together there does not seem to be any reason for suspecting that the seizure receipt was not issued after the reasons recorded, or that the reasons were not recorded prior to the seizure.
20. Similarly, in the case of the seizure at 12B, Russell Street (RN- 178 of 1997) the reasons recorded by M.K. Mukherjee, Inspector of Commer cial Taxes, clearly mention the circumstances under which the Inspector came to suspect that the dealer had been attempting to evade payment of sales tax. From the report it is seen that there were some bound books of accounts for the current year which are mentioned as order slips. None of these order slips showed the addresses of the persons who deposited the goods with the dealer. The partner stated that these orders were in respect of job-work being executed by them and the goods mentioned in those orders had been placed by the persons noted therein. The partner failed to give any satisfactory explanation, as recorded by the officer, why the addresses of the persons were not shown in any of these slips. Similarly, in respect of goods which were said to be connected with repairing, the names and addresses of the persons who have deposited the goods with the dealer were not available and the partner could not state the names and addresses. The officer recorded the details of a number of such slips. Similarly, some loose slips mentioned as road challans were detected showing despatches of goods by the dealer. Details of some of challans have been recorded but they were not supported by any sale bill or cash memo and the partners failed to produce such sale bill or cash memo in spite of being given, according to the officer, ample opportunity to do so. There was a bunch of sky colour loose slips bearing the name of the party and description and quantity of goods. These transactions appeared to the Inspector to be in respect of sales made by the dealer. The partner failed to give any satisfactory explanation in respect of these transactions. In view of the above observations, it is not possible to hold that the suspicion of the Inspector that the dealer was attempting to evade payment of tax was an unreasonable or perverse one. Mr. Chakraborty has objected to the reasons recorded by M.K. Mukherjee being considered because it was not annexed with the affidavit-in-opposition, but as has been observed earlier, this is a record which was produced at the time of hearing and it was produced on the basis of a prayer made in the affidavit-in-opposition in course of which leave for production of this record had been sought. Therefore, there is no reason why this document should not be considered by us. It is also to be noted that the applicant was very much aware of the existence of this record as the report drawn up by M.K. Mukherjee, Inspector of Commercial Taxes, is countersigned on each page by the partner S.P. Bhatter.
21. Regarding seizure of books of accounts on October 1, 1996 at the office of the Bureau of Investigation (in RN 179 of 1997) Mr.
Chakraborty submitted that no reason appears to have been recorded at all but the learned advocate for the respondents produced in course of hearing the reasons recorded by the A.C.C.T. on October 1, 1996 in terms of the statements made in the affidavit-in-opposition in course of which leave for production of the records had been sought. It is seen from this recording that the applicant could not have been unaware of the reasons having been recorded as the said record is countersigned by Pawan Kumar Agarwal, Accounts Assistant of Bhatter and Co. Mr.
Chakraborty has argued that in this recorded reason no details have been given and no specific material has been brought on record and he therefore submitted that the reasons so stated were not reasons in the eye of law. But we cannot agree with the contention of Mr. Chakraborty as on going through the record it is found that Shri Pawan Kumar Agarwal produced a set of books of accounts and other records all pertaining to the year 1994-95. These documents recorded the business transactions of Bhatter and Co., during the year 1994-95 and the dealer admittedly submitted his returns on the basis of the set of books of accounts which were produced. The Assistant Commissioner thereafter observed that another set of books of accounts and records had been seized from the residence of the partners on November 1, 1995 and the set produced by Shri Agarwal was completely different from the one seized on November 1, 1995. It is also noted that the set seized on November 1, 1995 reflects much higher turnover than what was shown by the books of accounts produced on October 1, 1996. The books of accounts and records produced by Pawan Kumar Agarwal were considered necessary to establish also the fact that the set previously seized on November 1, 1995 relates to the same business of Bhatter and Co., during the year 1994-95 and on that basis the Assistant Commissioner observed that he had reasons to suspect that the dealer was attempting to evade payment of tax and hence he proceeded to seize the books of accounts and records produced by Shri Pawan Kumar Agarwal. In our opinion, the suspicion of the Assistant Commissioner cannot be considered to be either unreasonable or perverse in the circumstances of the case.
22. Regarding the seizure at the residence of the partners of the two dealer concerns (i.e., at 13, Jatindra Mohan Avenue), Mr. Chakraborty argued that no details have been given in the affidavit of Shri Asit Mukherjee and there are no details of the documents said to have been examined. There is nothing to show that they had anything to do with the business of the applicant. He further stated that there was nothing to show that the recorded reasons had any connection with the seizure or that it was recorded prior to seizure. However, it appears from the record that there were five "khatas" out of which three were for the year 1994-95 and two were for the year 1995-96. The "khatas" contained business transactions with different parties. Three ledgers were found which reflected names of different parties and page numbers of some books of accounts. There was a flat file containing particulars of bank transactions of the partners with the Vysya Bank Ltd., Kalakar Street Branch, Calcutta. It is stated that none of these transactions could be explained by Mr. Bhatter although he was given sufficient time for explanation. Mr. Chakraborty has argued that no adverse inference can be drawn from the presence of the books of accounts in the residence of the dealer because only current books of accounts are to be kept in the place of business of the dealer. This argument really does not held the applicant's case and is also not correct. The report is dated November 1, 1995 and it is found that apart from the loose sheets which referred to transactions of 1990-91 and 1991-92 and fourteen loose sheets for which no years were mentioned the "khatas" were for 1994-95 and 1995-96. Considering the date of inspection and seizure, it could not be said that these were old documents whose presence in the residence of the partners could be anticipated. Secondly, Mr. Chakraborty's argument that there was nothing to show that the loose sheets had anything to do with the business of the applicant could be taken seriously if there had been any statement by Mr. Bhatter at that time indicating that these documents had no connection with his business.
The reasons recorded by Mr. A. Mukherjee on November 1, 1995 categorically state that Mr. Bhatter failed to explain, in spite of being given sufficient time, these transactions with regular books of accounts. Mr. Chakraborty has also argued that although this recorded reason indicates that there was suspicion that the dealer was trying to evade proper payment of sales tax, there was nothing to show any connection with the seizure or that it was recorded prior to seizure.
This does not appear convincing to us. As has been mentioned earlier in connection with the seizure at 23A, Kalakar Street, the recorded reason should be read along with the seizure receipt and mere presence or absence of certain words or phrases in the former document should not be considered to be necessarily of any serious significance. If the seizure receipt under Section 66 of the West Bengal Sales Tax Act, 1994 issued by Mr. A. Mukherjee, Inspector of Commercial Taxes on November 1, 1995 is read along with the reasons recorded by Shri A. Mukherjee on the same day, it would be clear that in the report on the seizure from the residence there is a clear mention of the fact that the Inspector had a suspicion that the dealer was trying to evade proper payment of sales tax. In the seizure receipt issued on the same day it is mentioned that as the officer had reasons to suspect that the dealer was attempting to evade payment of tax under the West Bengal Sales Tax Act, 1994, the accounts and records of the dealer indicated in the seizure receipt were being seized. On a joint reading of these two documents it appears that there is no reason to hold that this indicates in any that the reasons recorded in the report were not drawn prior to the issue of the seizure receipt. There is nothing to rebut the presumption that the official acts have been regularly performed.
It is worth noting that in their affidavit-in-reply (in RN-178 of 1997) the applicant has stated that the reasons were not recorded prior to the seizure and the report in which the alleged reasons were recorded was signed on behalf of the dealer under threat without being given an opportunity to go through the papers. However, this allegation, viz., that the applicant was compelled to sign the recorded reasons under threat was not made in the original application. As far as the seizure of the books of accounts at the place of business at 12B, Russell Street is concerned, the applicant had merely alleged that after the seizure receipt was prepared and handed over to the applicant, the Inspectors of Commercial Taxes made certain notes in separate papers but Shri Sheo Prakash Bhatter was not allowed to read the said papers.
There was no such allegation in respect of the seizure from the residence also. In RN-179 of 1997 also there was no allegation that the applicants were compelled to sign any recorded reasons by the officers concerned. In our opinion, in the facts of the case, there is no reason why the reasons recorded at the residence at 13, Jatindra Mohan Avenue should be held to be perverse or unreasonable or recorded not prior to the seizure.
23. The applicant has alleged that no order of retention of the books of accounts which were seized on October 1, 1996 was issued and hence the retention is illegal. This has been challenged by the learned advocate for the respondents who submitted that the notice under memo No. 2073BI dated August 26, 1997 fixing the date of hearing in respect of retention of these books of accounts was received by the applicant on August 30, 1997. As no one turned up on that day, an order was passed under memo No. 2230BI dated September 12, 1997 and he produced the acknowledgement card which showed that the addressee had received the same on September 22, 1997. The acknowledgement receipt was shown in the court room to the learned advocate for the applicant who thereafter admitted receipt of the same. Under the circumstances, the applicant's allegation that the retention of the books of accounts seized on October 1, 1996 was without any legal authority cannot be considered to be valid. Regarding the retention of documents seized on November 1, 1995 (in RN-178/97 and RN-179/97), Mr. Saha has argued that a show cause notice was issued to the dealer in each of these two cases asking him why the seized records would not be retained up to October 31, 1997 for the purpose of investigation. The learned advocate representing the applicant appeared on October 1, 1996 and filed letters from the partners stating that they had no objection to the retention of records up to October 31, 1997. The oral pleading by the learned advocate was to the identical effect and thereafter respondent No. 3 allowed the retention of the records upto October 31, 1997. Mr.
Chakraborty has argued that the Additional Commissioner should have communicated in the show cause notice itself the reasons why the C.T.O.sought the sanction. In the absence of such reasons the notice was, he argued, bad and consequential orders were also bad. Even if there was no objection on the part of the applicant, acquiescence on the part of the applicant, Mr. Chakraborty argued, does not cure this legal defect.
He referred in this connection to the case of Ram Kumar Roshanlal [1992] 87 STC 465 ; (1990) 23 STA 244, where this Tribunal had held that for non-communication to the applicants of the reasons for retention stated in writing by the Commercial Tax Officer at the time of seeking sanction from his superior authority, the retention orders must be quashed. However, the facts in that case were quite different.
In that case the applicant only received an order dated January 30, 1989 informing them that sanction in terms of proviso (b) to Section 14(3A) of the BFST Act had been accorded by the Additional Commissioner of Commercial Taxes for retention beyond the period of one year of the seized books of accounts and documents till January 31, 1990. No opportunity of being heard was given to the dealer before the approval was given and this position was not disputed. In the instant case the facts are completely different. The applicants received the show cause notice and appeared during the hearing. In the course of the hearing they themselves agreed that they had no objection to such retention and letter to that effect was filed by the advocate of the applicant.
Orally also the same submission was made by the advocate. Under the circumstances, there is no reason to hold that there was any failure of natural justice and the retention order cannot, on that account, be considered to be invalid. It cannot be said that respondent No. 3 acted mechanically, and we hold that the order passed by him is a valid one.
24. The applicants have challenged the validity of the seizures on the ground of non-compliance with the provisions of Rule 207, because in the case of the seizure at the office of the Bureau of Investigation, there was admittedly no witness, while in each of the other three seizure cases, there was only one witness and not two as specified under Rule 207. This is an argument which does not appeal to us. It will appear from Rule 207 that provisions of the Code of Criminal Procedure had neither been applied in toto, nor mandatorily. The provisions have to be followed in searches and seizures under the Sales Tax Act only "as far as possible". How far Rule 207 can be or has been complied with in a particular case depends on the facts of the case. We must not lose sight of the fact that the provisions of the Criminal Procedure Code relating to presence of witnesses during seizure is not just a ritual. It has a specific purpose to serve. In criminal cases the fact of seizures of the articles from the possessor should be proved by convincingly fair and independent evidence to guard against planting or fabrication of evidence. In the cases before us there is no such dispute. It is not the case of the applicants that any records have been planted on them or that the records seized had not been recovered from their possession. Where there is no dispute as to the identity of the books of accounts and the place of the seizure, the number of witnesses or presence of witness will not be very significant in deciding upon the validity of the seizure. The fact that no independent witness was available in the course of the seizure of the books of accounts at the office of the Bureau of Investigation, beyond office hours cannot vitiate the validity of the said seizure because the applicants have not disputed the place of the seizure and the identity of the books of accounts seized there. Therefore, we are of the opinion that the challenge to the validity of the seizures on the ground of non-compliance with Rule 207 cannot be sustained.
25. In the circumstances mentioned above, we hold that the seizure of the books of accounts from the places of business at 12B, Russell Street (in RN-178 of 1997) and 23A, Kalakar Street (in RN-179 of 1997) on November 1, 1995 are valid. The seizure of books of accounts on October 1, 1996 in the office of the Bureau of Investigation by the A.C.C.T. in RN-179 of 1997 is also held to be valid. The seizure of books of accounts and documents from the residence of the partners at 13, Jatindra Mohan Avenue in RN-178 of 1997 and RN-179 of 1997 is also held to be valid. Retention orders in respect of the books of accounts seized from the residence of the applicants and the business places of the applicants as well as in the office of the Bureau of Investigation in these two cases are also held to be valid.
The applications are, therefore, dismissed. There shall be no order as to costs.