A.K. Mathur, J.
1. The petitioner by this writ petition has prayed that the first proviso to Section 22(3) of the Rajasthan Sales Tax Act, 1954 may be declared ultra vires to the extent it empowers the respondent No. 2 to sanction the retention of the seized account-books and documents being ultra vires of Article 19(1)(g) of the Constitution of India. He has also prayed that by an appropriate writ, order or direction the order dated 16.12.1987 (Annex. 7) may be quashed and the respondents may be directed to return the account-books and documents seized by the respondents. It is also prayed that the respondents may be restrained from recovering the demand in pursuance of Annexs. 13 and 14 and demand notices Annexs. 15 and 16 respectively.
2. The petitioner is a partnership firm known and styled as M/S Khanna Electric Stores, Sri Ganganagar located at Sri Ganganagar. It is constituted by 5 partners Sarva Shri Kashmirilal, Sudarshan Kumar, Raghuveer, Jaswantlal and Smt. Rampyari. The petitioner carries on the business of electric goods of all kinds. The petitioner has a sister concern known and styled as M/S Khanna Electric Corporation a partnership firm constituted by 4 partners: Sarva Shri Raghuveer, Sudarshan Kumar, Jaswantlal and Smt. Rampyari and they are doing the business of electric goods at Sri Ganganagar and is located in the same premises. Shri N.R. Vyas, respondent No. 3 while posted as Assistant Commercial Taxes Officer, Ward No. 1 of Sri Ganganagar Circle, was the assessing authority in relation to the petitioner under the provisions of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as 'the Act of 1954'). After the transfer of respondent No. 3 as Assistant Commercial Taxes Officer, Anti-Evasion, Bikaner, he ceased to be the assessing authority of the petitioner under the provisions of the Act of 1954. The respondent No. 3 while posted as Assistant Commercial Taxes officer, Wardl, Sri Ganganagar allegedly received information from the Inspectors Commercial Taxes, Sarva Shri K.D. Sharma and Santilal that the petitioner was indulging in tax evasion and on the basis of that information on 14.8.1986 raided the business premises of the petitioner accompanied by another Assistant Commercial Taxes Officer, Ward II and the abovenamed two Inspectors. Shri Sudarshan Kumar partner of the petitioner firm was available at the shop. Respondent No. 3 enquired from Shri Sudharshan Kumar, partner about the account-books of the petitioner firm and he told respondent No. 3 that the account- books were with the Muneem of the firm at his house. The cash- memos and bills found at the shop were said to have been initialed by the respondent No. 3. Meanwhile Shri Raghuveer another partner of the petitioner firm appeared at the scene and enquires were also made from him about the account-books of the petitioner He also informed that the account-books were with the Muneem of the firm at his house. At this moment it is alleged that the Inspector, who was a member of the raiding party informed the respondent No. 3 that the Muneem Girdhari Lal was writing the account-books on the 'Duchhati' an apartment in the shop. The books of the petitioner firm and that of the sister concern M/S Khanna Electric Corporation were found there which were seized by the respondent No. 3 as he noticed that there was evasion of sales-tax. The respondent No. 3 prepared a common seizure memo of the account books and the documents found there and furnished a copy of the same to the petitioner. It is alleged that the act of the respondent No. 3 in effecting the seizure was illegal as he had not complied with the provisions required for search and seizure under the Code of Criminal Procedure for conducting the search and seizure as Sub-sections (4) and (8) of Section 22 of the Act of 1954 require that those provisions have to be complied with. It is further submitted that since search and seizure was illegal and, therefore, under the first proviso to Section 22(3) of the Act of 1954 the seizure of the account- books and documents and retaining the same beyond 3 months is bad likewise the further extention if any, granted by the Commissioner is bad as well because no reasons have been Tecorded by the Commissioner and the order was not communicated to the petitioner. It is also submitted that the transfer of this case from the regular assessing authority of the petitioner i.e. Assistant Commercial Taxes Officer, Ward 1 Sri Ganganagar to the Assistant Commercial Taxes Officer, Anti Evasion, Bikaner respondent No. 3 under the provisions of Rule 52(1) of the Rajasthan Sales Tax Rules, 1955 (referred to hereinafter as 'the Rules of 1955') is also bad as the same being in violation of the principles of natural justice, as the petitioner was not afforded a reasonable opportunity of being heard before transferring this case. In this back-ground, the demand notices for the years 1985- 86 and 1986-87 have been challenged by the petitioner by filing the present writ petition.
3. A reply has been filed by the respondents and the respondents have taken the position that the respondent No. 3 was posted as Assistant Commercial Taxes Officer, Ward No. 1, Sri Ganganagar and he was the assessing authority of the petitioner firm under the provisions of the Act of 1954. It is also admitted that Shri N.R. Vyas was transferred as Assistant Commercial Taxes Officer, Anti Evasion, Bikaner in the month of July, 1987. Shri N.R. Vyas, respondent No. 3, while working as Assistant Commercial Taxes Officer. Ward 1, Sri Ganganagar did survey the business premises of the petitioner firm on 14.8.1986 in the presence of the petitioner firm's partner Shri Raghuveer. It is submitted that when the premises of the petitioner firm were being inspected Shri Sudarshan, partner of the firm was present and he was informed by the respondent No. 3 that he being the Assistant Commercial Taxes Officer, Ward-I, Sri Ganganagar Circle and being the assessing authority of the petitioner firm wanted to survey and inspect the business premises of the petitioner firm. Shri Sudarshan Kumar allowed the respondent No. 3 to survey and inspect the premises of the petitioner firm. The respondent No. 3 and other members of the survey party entered in the business premises of the petitioner firm to carry out survey and inspection. During the course of survey and inspection on 14.8.1986 the respondent No. 3 asked Shri Sudarshan Kumar a partner of the petitioner firm to produce the books of accounts of the petitioner firm for inspection. Meanwhile another partner Shri Raghuveer came there and he was also asked to produce the account-books but they knowingly furnished wrong information that the same are available at the residence of the Muneem but it was found that the Muneem Girdhari Lal was writing the accounts books at Duchhati (Mazinine floor of the business premises). Therefore, all these account-books were seized and necessary memos were prepared and the list was given to the petitioner. It is submitted that the document Annex. 2 filed by the petitioner purported to be of 14.8.1987 is absolutely wrong (But after perusing the file it appears that it bears the date 14.8.1986 only and not 1987). It is submitted that it is wrong to say that respondent No. 3 carried out the search of the business premises of the petitioner firm in exercise of the powers conferred by Section 22(4) of the Act of 1954 but the account-books and documents were seized under Sub-section (3) of Section 22 of the Act of 1954. The allegation of illegal search has been denied. It is submitted that since the respondent No. 3 neither searched nor raided the business premises of the petitioner firm, therefore, there was no need for the respondent No. 3 to obtain search warrant or to summons two independent, respectable witnesses of the locality. It is submitted that under Section 22 of the Act of 1954, these conditions are not required to be complied with in case of any survey and inspection of business premises of the petitioner firm or any assessee. Therefore, it is contended that it was not a case of raid or search but it was a case of survey and inspection, which is covered by the provisions of Sub-section (2) of Section 22 of the Act of 1954. It is further submitted that the account-books were retained by the respondent No. 3 beyond the period of 3 months under the orders of the Commissioner, Commercial Taxes, Rajasthan. Thus, it is submitted that the retention is also not illegal. Regarding the transfer of the file of the petitioner firm by the Commissioner, Commercial Taxes, Rajasthan to the Assistant Commercial Taxes Officer, Anti Evasion, Bikaner, it is submitted that this was done in the exercise of the power under Rule 52(1) of the Rules of 1955. A notice dated 16.10.1987 was served on the petitioner in exercise of the power conferred by Sub-rule (1) of Rule 52 by the respondent No. 2, whereby it was proposed to transfer the case of the petitioner firm from the Assistant Commercial Taxes Officer, Ward 1, Sri Ganganagar to the Assistant Commercial Taxes Officer, Anti Evasion, Bikaner, respondent No. 3. It is submitted that even before issuance of the notice dated 16.10.1987 by the Commissioner, Commercial Taxes, Rajasthan, the petitioner firm was served with a notice dated 31.7.1987 (Annex. R. 2) fixing 10.8.1987 as the date on which the petitioner was required to file his objections for transfer of the file. But the petitioner firm sought time to file reply and the case was adjourned from 10.8.1987 and 31.8.1987. But on that date no one appeared before the Commissioner to oppose the proposed transfer of the file. The Commissioner, Commercial Taxes, Rajasthan again afforded an opportunity to the petitioner firm and, therefore, the notice dated 16.10.1987 was issued whereby the petitioner firm was asked to appear on 3.11.1987 to show rause against the transfer of the file. This notice was served on the petitioner on 20.10.1987, which is evident from the signature of Shri Raghuveer, a partner of the petitioner firm and the same has been filed as Annex. R.3. But still the petitioner firm did not choose to file any reply and communication dated 2.11.1987 was dispatched from Ganganagar, when the case was filed on 3.11.1987 before the Commissioner, Commercial Taxes, Rajasthan. This was received by the Commissioner, Commercial Taxes on 6.11.1987 and not on 4.11.1987 as contended by the petitioner in the writ petition. It has also been denied that the respondent No. 3 was on tour on 3.11.1987. It is submitted that by the order dated 4.11.1987, the Commissioner, Commercial Taxes, Rajasthan directed the transfer of the file of the petitioner firm from the file of the Assistant Commercial Taxes Officer, Ward No. l,Sri Ganganagar to the Assistant Commercial Taxes Officer, Anti Evasion, Bikaner. Therefore, it is submitted that the assessment made on the basis of those seized accounts books and documents by the respondents and a notice of demand are well justified.
4. We have heard learned Counsel for the parties at length and perused the recovd.
5. Mr. Garg, learned Counsel for the petitioner has challenged the validity of proviso to Sub-section (3) of Section 22 of the Act of 1954 being violative of Article 19(1)(g). In this connection, suffice it to say that the Division Bench of this Court in the case of Nathulal Fatehpuria v. State of Rajasthan and Ors. has already upheld the validity. Likewise in Hiralal Chhaganlal and Ors. v. State of Rajasthan and Ors. A.I.R. 1968 Rajasthan 188 this Court has also upheld the validity of Section 22(3) of the Act of 1954. While upholding the validity of this Sub-section, it was observed as under:
The provisions of Section 22(3), (4) and (6) of the Rajasthan Sales Tax Act do not violate Article 19(1)(g) or (g) of the Constitution. The reasons are as under:
(1) The provisions have been enacted to enable the Sales- tax authorities to prevent the evasion of tax and, therefore, the purpose underlying these provisions is undoubtedly in the general public interest.
(2) As a result of seizure of account books a dealer is certainly deprived of their use and to that extent there is infraction of his fundamental right, but the underlying purpose of seizing the account books is for the collection of the legitimate tax dues of the State and to prevent the evasion thereof. It will not be open to the concerning officer to retain the account books or documents seized by him Indefinitely without his utilising them for the purposes of their examination or for any enquiry or proceeding or for a prosecution. The restriction contained in Sub-section (3) of Section 22 is not disproportionate to the evils sought to be eliminated.
(3) The necessity of recording the reasons in writing is calculated to eliminate arbitrariness on the part of the authority or officer concerned while the reason for suspicion in the mind of the officer may not be capable of easy scrutiny, the reasons that the officer has to record in writing are capable of proper scrutiny. Apart from this, it will be open to the revisional authority under Section 14 to scrutinise the reasons recorded by an authority providing a further check on the action that may be taken under this provision.
(4) Sub-section (4) of Section 22 is only incidental to sub-section (3) of Section 22 and, therefore, whatever is said about Sub-section (3) is equally applicable to Sub-section (4).
(5) The power of seizure and confiscation of goods under Sub-section (6) of Section 22 is not arbitrary, nor the provision Is unreasonable. When the authority would be acting under this Sub-section It is expected to follow the principles of natural justice and will be arriving at a decision quasi-judicial-ly.
Therefore, the validity of Sub-section (3) of Section 22 is no more res integra.
6. Mr. Garg, learned Counsel for the petitioner has submitted that the search in the present case is not according to law and therefore, the search was illegal. He submitted that for conducting search and seizure under Section 22(4) of the Act of 1954, the provisions of the Code of Criminal Procedure have been made applicable. It is submitted that in the present case, no such formalities as required under the Code of Criminal Procedure that the two independent and respectable persons of the locality have to be called as witnesses and search warrant has to be obtained were not complied with. In this connection, learned Counsel for the petitioner has invited our attention to G.M. Agadi & Bros. v. The Commercial Taxes Officer, Enforcement Northern Zone, Belgaum (1973) 32 S.T.C. 243; Binny Limited v. Assistant Commercial Taxes Officer (Intelligence) LR, South Zone, Bangalore (1988) 71 S.T.C. page 240 and Kehar Singh v. The State (Delhi Admn.) AIR 1988 S.C. 1833. The stand of the respondent State is that it was not a case of search and seizure but it was a case of survey and inspection as required by Sub-section (2) of Section 22 of the Act. Therefore, it is not necessary to have complied with the provisions of Sub-section (4) read with Sub-section (8) of Section 22 of the Act of 1954. A distinction has been sought to be made between search and inspection.
7. We have considered the arguments of both the learned Counsel in terms of Sub-section (2) of Section 22 read with Sub-section (4) and Sub-section (8) of Section 22 of the Act of 1954. Sub-section (2) of Section 22 says that it will be incumbent upon the dealer to keep his business premises, godown, factory, vessel or vehicle etc. open for inspection and examination of the authorities at all reasonable times. Therefore, the concerned authority can always survey and inspect the business premises of a trader and for such inspection and examination there is no prohibition. But Sub-section (3) says that if an officer or authority has reason to suspect that any dealer is evading payment of tax then he may for reasons to be recorded in writing seize his account-books, registers or other documents and shall give the receipt of those seizure. Sub-section (3) further says that such officer who seized those account-books, registers and other documents shall retain those account-books, registers and documents for their examination or for any enquiry or proceedings or for prosecution so long as they are necessary. But a proviso has been added which lays down that such accounts-books, registers and documents seized shall not be retained beyond a period of 3 months without a reasoned order passed by the Commissioner in this behalf. This period of 3 months has now by a subsequent amendment has been extended to 6 months. Be that, as it may, the legislature has put a rider on the power of the authorities that they will not retain the account-books, registers or documents seized beyond a period of 3 months and if it is required beyond the period of 3 months, then the higher authority i.e. Commissioner, Commercial Taxes, Rajasthan can extend the period for retention after recording the reasons thereof. Sub-section (4) of Section 22 of the Act of 1954 lays down that for the purposes of Sub-sections (2) and (3) the concerned authority shall have the power to enter and search at all reasonable times any office, shop, godown, vessel, vehicle or any other place of business or any building or place where such authority has reason to believe that the dealer keeps account- books, registers or other documents pertaining to his business and also to search the body of any other person where it has reason to suspect that he may have to his personal possession any such goods, books of accounts, registers or documents. Sub-section (8) says that the provisions of the Code of Criminal Procedure relating to searches shall apply so far as to such searches done under Sub-section (4) of Section 22 of the Act of 1954. That means that the provisions of the Code of Criminal Procedure will be applicable to the searches made/done under sub-section (4) of Section 22 of the Act of 1954. But it will not be applicable to the provisions of Sub-section (2) of Section 22. Sub-section (2) lays down that the authorities will have a right to enter into the business premises of the trader for survey and inspection at all reasonable times. The moment they start search then that action will be covered by the provisions of Sub-section (3) of Section 22, though initially it may be with an intention to enter the premises for survey and inspection. But the moment they apprehend that there is evidence of evasion of sales tax then from that stage onwards the enquiry turns into a search and the authorities will collect the incriminating documents, the moment that stage starts the provisions of Sub-section (3) come into play then for such search/seizure the provisions of the Criminal Procedure Code will have to be complied with and search can proceed thereafter. Therefore, there is a distinction between survey and inspection on the one hand and search and seizure on the other hand. Sub-section (4) only enables the authorities to enter into the business premises and search at all reasonable times any office, shop, godown, vessel and vehicle or any other place of business or any building or place where any such authority or person has reason to believe that the dealer keeps or for the time being keeping any goods, account books, register & other documents. Nonetheless the moment the authorities start making exhaustive enquiry and collecting the incriminating material that amounts to search and for that the provisions of the Code of Criminal Procedure have to be complied with.
8. In the present case, it is true that when the Assistant Commercial Taxes Officer, respondent No. 3 alongwith his officers entered the premises of the petitioner firm for just inspection and survey, it was found that there was a case of further search as there was suspicion of evasion of tax and in that process they seized certain incriminating documents of the dealer and while seizing these documents etc. the raiding party should have to follow the procedure prescribed in the Code of Criminal Procedure i.e. they should have obtained the search warrant or atleast called 2 independent and respectable witnesses of the locality for search and seizure. But no such steps were taken by this party and they have only seized the documents. No justification has been pointed out in the reply. Only it was stated in the reply that the party headed by the Assistant Commercial Taxes Officer went for inspection and survey and during that time they seized certain account-books and registers from which it was apprehended that there was evasion of tax. It has not been pointed out as to why, when such search and seizure were being undertaken, the two independent and respectable witnesses of the locality were not summoned. From these facts, it emerges that during the inspection and survey which ultimately resulted in search and seizure of the documents, the raiding party did not comply with the provisions of Sub-section (8) of Section 22 of the Act of 1954 i.e. they have not followed the procedure for search as required under the Code of Criminal Procedure. Therefore, such search and seizure of the documents etc. cannot be said to be valid and the same is invalid. In this connection, Mr. Garg, learned Counsel for the petitioner has invited our attention to G.M. Agadi & Bros, (supra).
9. In G.M. Agadi & Bros, (supra), it was held that all searches are inspections, but all inspections are not searches. A search is a thorough inspection of a man's house, building or premises or of his person with the object of discovering some material, which would furnish evidence of guilt for some offence with which he is charged. In this case, it was also held that the action of the respondent amounted to a search of the petitioner's premises for the purpose of securing hold of the concealed account books and as the provisions of the Criminal Procedure Code required to be followed were not followed/complied with by the respondent, the search was illegal and the seizure of the account books also became illegal.
10. Similarly in the case of Binny Limited (supra) the facts are that the respondent visited the premises of the two appellants and the account books of the appellants were made available for his scrutiny. He noticed certain discrepancies and seized some documents and books from the appellant under Section 28(3) of the Karnataka Sales Tax Act, 1957. The two appellants challenged the seizure by filing writ petition being illegal on the ground that it was made without complying with the mandatory requirements of the provisions of Section 28 of the Act of 1957. The learned Single Judge dismissed the petitions of both the appellants on the ground that the seizure was made upon inspection and not upon search and therefore, the seizure was legal. Therefore, both the appellants filed appeals and in the appeals it was held that the seizure was illegal and the documents were ordered to be returned, though the department was permitted to retain the extracts and notes made therefrom.
11. In the case of Kehar Singh and Ors. (supra), the Hon'ble Supreme Court held that under the provisions of the Code of Criminal Procedure, for search and seizure two respectable witnesses either from the locality or otherwise should be taken so as to lend support to the case of the prosecution. The presence of two public witnesses under the Scheme of the Code of Criminal Procedure is necessary.
12. Mr. Mehta, learned Counsel for the revenue could not justify the search and seizure of the account-books and registers and other documents of the assessee, without following the procedure prescribed in the Code of Criminal Procedure. Thus, in the present case, it is established beyond doubt that the search of the premises of the petitioner was illegal and likewise the seizure of the account-books and documents.
13. The next question is that as to what is the effect of such illegal search and seizure?
14. Mr. Garg, learned Counsel for the petitioner submitted that once it is held that the search is illegal then those seized material cannot be used for assessing the tax liability of the petitioner.
15. We are afraid this contention of the petitioner cannot be sustained. It is true that the search and seizure both were illegal but still if it is found that the assessee has evaded the sales tax then the same can be used by the authorities for assessing his tax liability.
16. Mr. Mehta, learned Counsel for the respondents has invited our attention to S.G. Nadakattinavar v. Commercial Taxes Officer II Circle, Hubli (1975) 35 S.T.C. 484.
17. In that case, it was held that the courts should examine in each case whether the petitioner has been really prejudiced by the seizure of account books by the assessing authority or not. Each case has to be decided on its own merits.
18. Similarly, in the case of Agrawal Engineering Stores and Ors. v. The State of Uttar Pradesh and Ors. (1972) 29 S.T.C. 446, it was held that there is no constitutional impediment in the way of using the evidence obtained through illegal search and the common law permits the user of such evidence with certain exceptions. Therefore, such evidence need not be excluded from consideration in assessment proceedings under the Act. Therefore, each case has to be decided as to whether by seizure of the account-books the other party has been prejudicated or not. But there is no prohibition if it is found from the books of accounts belonging to the assessee that the assessee has evaded the payment of sales tax, then the same can be used for assessing the liability of the incumbent after due notice to the assessee. After all a deliberate evasion of the sales tax is a public wrong and if the public wrong is brought to the notice of the assessing authority the authorities cannot ignore such public wrong. Therefore, simply because the account-books which show the evasion of sales tax were seized in an illegal manner then too the same can be used for assessing the tax liability of the assessee after due notice to him. Thus, in our opinion, there is no prohibition for the taxing authorities to use these account-books and registers seized from the premises of the incumbent for assessing the tax liability of the petitioner after due notice to the, assessee to account for the evasion on the basis of these account-books and other incriminating documents. Thus, this contention of Mr. Garg is overruled.
19. The next question learned Counsel urged before us is that the retention of the books beyond the period of 3 months is illegal. It is submitted that no unguided or unlimited power can be conferred on the authorities to retain the books. In this connection, suffice it to say that the proviso to Sub-section (3) of Section 22 only provides the period of 3 months to the officer/authorities for retaining the account books, registers or documents etc. seized and after the period of 3 months if they want to retain the same then they will have to obtain an order in writing from the Commissioner for reasons to be recorded therein. There is no two opinion that the executive authorities cannot be given unbridled power to retain the account-books and registers or documents of the trader so as to put him out of gear from his working. Therefore, the maximum ceiling provided under the proviso is 3 months and if further time is required to be extended then the Commissioner, who is a superior authority, has to extend the period for reasons to be recorded in writing. This is a great check on the arbitrary exercise of power and it is expected that the senior officer like the Commissioner will act in a reasonable way, and will not extend the period unless he is satisfied that the retention is necessary and he will record the reasons thereof. In the present case, the documents etc. were seized way back on 14.8.1986 and the same were not delivered back to the assessee after the period of 3 months and no order recording the reasons was communicated to the assessee. In reply to this contention, the respondents stated that the documents etc. were retained after due sanction accorded by the Commissioner, Commercial Taxes at regular intervals and that too before the expiry of the extended period. But no such order of extension has been placed on the record.
20. Mr. Garg, learned Counsel for the petitioner has invited out attention to Commissioner of Income Tax, U.P. and Ors. v. Jawahar Lal Rastogi : [1970]78ITR486(SC) .
21. This was a case under the Income tax Act, 1961, Under Section 132 of the Income-tax Act, 1961 the officer can retain the books of account or other documents seized under Sub-section (1) of Section 132 upto a period of one hundred and eighty days from the date of the seizure. The documents seized were retained by the officer for 19 months. Therefore, writ petition was filed before the Calcutta High Court challenging the seizure. The High Court found that the Commissioner of Income-tax and the Income- tax Officers acted beyond the legitimate scope of Section 132 of the Act and there was force in the complaint of the assessee that the opposite parties carried out indiscriminate search, which constituted abuse of power conferred on income-tax authorities by Section 132 of the Act. On appeal, the Hon'ble Supreme Court upheld the order of the High Court on the ground that the documents seized were detained without authority of law for a period exceeding 180 days contrary to the terms of Section 132(8) as amended by the Income-tax (Amendment) Act, 1965.
22. Likewise, Metal Fittings P. Ltd. and another v. Union of India and Ors. : [1983]141ITR758(Delhi) was also a case under the Income-tax Act, 1961 and the Delhi High Court held that under Section 132 of the Income-tax Act, 1961, it is a condition precedent for retention of the documents seized beyond the period of 180 days that approval of the Commissioner should be obtained before the expiry of the period of 180 days and the Commissioner has to record its reasons, as the provisions were found to be mandatory.
23. Likewise, in the case of Commissioner of Income-tax, West Bengal III and Ors. v. Oriental Rubber Works : [1984]145ITR477(SC) , it was held that retention of the books beyond the period of 180 days is illegal and the extension should be obtained before the expiry of the period of 180 days and the Commissioner should record the reasons for further extension of the period and it was held that the communication thereof is mandatory and in default of such expeditious communication regarding the approval of the Commissioner and for retention of the books and documents seized by the authorities, the retention will be invalid and unlawful.
24. Mr. Mehta, learned Counsel for the department has submitted that all these cases which have been cited by the learned Counsel relate to the Income-tax Act and that does not provide any assistance for deciding the present question under the Rajasthan Sales Tax Act, 1954.
25. It is true that the cases cited by the learned Counsel for the petitioner relate to the Income-tax Act, but the present proviso' to Sub-section (3) of Section 22 is some what identical to Section 132 of the Income-tax Act. There also the Officer can retain the books and documents etc. seized upto the period of 180 days and for further retention a proper approval has to be received from the Commissioner and he has to record the reasons for the same. To this extent the provision of the Income-tax Act is almost analogous to the present provision of the Rajasthan Sales Tax Act. Therefore, recording of the reasons by the Commissioner for extension of retention is a must and if the extension has to be sought by the officer before the expiry of the period of 3 months (now the period has been extended upto the period of 6 months by an amendment). Since we are concerned with the unamended provision under which the period was 3 months, therefore, two conditions have to be fulfilled (i) that the officer has to seek extension of the period of retention of the account-books before the expiry of the period of 3 months, and (ii) if the Commissioner thinks that the retention of the documents is necessary then he has to record the reasons for approval of the same. If the authority does not move the Commissioner before the expiry of the period of 3 -months then the period automatically lapses and the retention becomes illegal. Likewise, if no reasons have been recorded by the Commissioner then too also the retention of the account-books and the documents will be rendered invalid. The proviso to Sub-section (3) of Section 22 has to be treated as mandatory as this is a possible check against the arbitrary action of the authorities and this will operate as a pressure on the authorities to dispose of the matter expeditiously. At the same time, it will be in the interest of the public that the authorities may not sleep over the matters for months together and allow the assessee to suffer in his business on account of unnecessary retention of the account-books as well as the documents. Therefore, we hold that the proviso to Sub-section (3) of Section 22 is mandatory.
26. The next question relates to the communication of the order of Commissioner.
27. In the case of Oriental Rubber Works (supra) the Hon'ble Supreme Court held that the non-communication of the reasons recorded by the Commissioner for extension will render the retention illegal. But that was so because an appeal against the order of the Commissioner was provided under the Act. Therefore, if the reasons are not recorded and communicated to the party for retention of the account-books and document, the party will not be able to effectively file an appeal before the Board. Therefore, in that context, the Hon'ble Supreme Court held that the communication of the reasons is mandatory. But here there is no such provision of appeal against the order passed by the Commissioner permitting the officer to retain the account-books and other documents beyond the period of 3 months. As such it cannot be held that the non-communication of the reasons will render the retention illegal.
28. In the present case, no order extending the period of 3 months has been placed on the record. It has only been said in the reply that the books were retained with due approval of the Commissioner. But the order of the Commissioner extending the period of retention has not been placed on the record. It is expected that the authorities should have placed on record the reasoned order of the Commissioner so that the Court could have an opportunity to examine the reasons given by the Commissioner for further retention of the documents and account books and whether those reasons are germane to the issue or not. Since the proviso requires that the reasons have to be recorded in writing, therefore, the recording of the reasons is a' must and at the same time it will also operate as a check on the power of the Commissioner that the extension will not be granted as a matter of routine, as it will be open to judicial review. But in any case no reasons have been placed for our consideration except a bare statement in the reply that the retention was with the due approval of the Commissioner. In the absence of any order being placed on the record, it is inferred that no such order appears to have been obtained by the authorities otherwise there is no reason why they will withhold the order from this Court. Therefore, on this count also we are of the opinion that the retention of the account books and the documents in the present case is also illegal.
29. Lastly, it was argued by the learned Counsel that in the present case, the file of the petitioner was transferred by the Commissioner from the Assistant Commercial Taxes Officer, Ward 1, Sri Ganganagar to the Assistant Commercial Taxes Officer, Anti Evasion, Bikaner. It is submitted that this transfer is also illegal as the representation filed by the petitioner was not taken into consideration before transferring this case. In this connection, the respondents have already submitted their reply that the petitioner was given a notice as required under Rule 52(1) of the Rules, that before transferring the file a notice has to be given to the assessee and it is pointed out that a notice was given to the petitioner on 31.7.1987 (Annex. R.2) fixing the date 10.8.1987 as the date on which the petitioner was required to file a reply/objections. Thereafter, petitioner sought time to file the reply and the case was adjourned to 31.8.1987 but on this date no one appeared before the Commissioner and again a notice was given on 16.10.1987 and it was directed that the petitioner should appear on 3.11.1987 and to show-cause against the proposed transfer. This notice was served on the petitioner on 20.10.1987, a copy whereof has been placed on the record as Annex. R.3, which bears the signature of Shri Raghuveer a partner of the petitioner firm. But no reply was received till 2.11.1987 and the case was fixed on 3.11.1987 before the Commissioner for orders. It is admitted that a reply was received in the office of the Commissioner, Commercial Taxes dated 2.11.1987, on 6.11.1987 and not on 4.11.1987 as alleged by the petitioner. Therefore, the matter was decided by the Commissioner without taking the representation of the petitioner.
30. From the narration of these facts we are satisfied that the petitioner had been given sufficient opportunity to make his representation but he did not choose to file any reply when the notice was given to him on 31.7.1987 and he sought time on 10.8.1987. Then, again he did not appear on 31 8.1987. When second notice was given he was expected to file reply by 3.11.1987 but he dispatched the reply on 2.11.1987 which reached the office of the Commissioner, Commercial Taxes, Rajasthan on 6.11.1987 and before that on 3.11.1987 the Commissioner had already reserved the order. Therefore, in view of these facts, it cannot be said that the transfer was made by the Commissioner without complying with the provisions of Rule 52(1) of the Rules. Therefore, this contention of Mr. Garg has no merit and the same is overruled.
31. It has been pointed out that though the assessment has already been made by the assessing authority on 25.2.1991 as the interim order passed by this Court could not be extended and the same expired on account of an application moved by the respondents under Article 226(3) of the Constitution of India and likewise no order could be passed on the second stay application before the assessing authority decided the case of the petitioner on 25.2.1991.
32. Upshot of the above discussion is that the retention of the account-books, registers and other documents etc. of the petitioner was illegal and the same should be returned to the petitioner firm forth-with. The assessment made on the basis of those account-books etc. cannot be said to be illegal and it is open for the petitioner to file an appeal against the assessment order and challenge the same in accordance with law.
33. Mr. Garg, learned Counsel for the petitioner has submitted that the period for filing an appeal against the assessment order has already expired as the matter was pending before this Court. Therefore, the petitioner may file an appeal against the assessment order passed by the authorities and the objection of delay will not come in the way of the petitioner if the appeal is filed within 4 weeks from the date of this order.
34. The writ petition is accordingly disposed of.