Rama Jois, J.
1. The legality of search and seizure of certain account books made by the Commercial Tax Officer (intelligence), Belgaum - the respondent in the petition - is challenged in this writ petition by a registered partnership firm being a registered dealer under the provisions of the Karnataka Sales Tax Act (hereinafter referred to as the Act).
2. The impugned order made by the respondent being relevant is extracted below :
'Order of seizure under section 28(3) of the K.S.T. Act, 1957 :
I visited the business premises of M/s. S. Y. Modagekar & Sons, Ganeshwar Galli, Shahapur, Belgaum, on 10th March, 1976, at about 6-30 P.M. and conducted the inspection along with C.T.O. (Enf.) III, N.Z., Belgaum, and the C.T.Is. of the officer. At the time of my inspection shri Shasikant Shamrao Modagekar, the partner, was present and he produced the current books of account and sale bills for inspection. On examination it was found that the assessee had written the day-book up to 5th March, 1976, on which the closing balance was not struck and I have signed the same on page 27. Katcha cash book was written up to 6th March, 1976, in which closing balance was not struck and the regular cash book was written up to 9th February, 1976, in which the closing balance was Rs. 105.04 and I have signed the same on pages 124 and 150 respectively, and have also signed on the last labour bill No. 2714 dated 8th March, 1976, for Rs. 1,000.00 and the last sale bill No. 242 dated 20th January, 1976, for Rs. 795.00 for sale of brass lotas.
In the course of my inspection I noticed a small pocket note book written from 1st September, 1975, to 1st November, 1975, three tip pen books, six diaries and one letterhead book containing certain transactions kept along with the regular books of account. On test check it was noticed that some of the transactions contained in the above books have not been accounted for in the regular books of account. An opportunity was given to the partner present to explain the discrepancies noticed, which he failed to do. Therefore, I have every reason to suspect that the dealer has been suppressing some of the transactions recorded in the above books. Therefore, I consider it necessary to secure the same along with katcha cash books for the current day-book for further detailed verifications.
I, B. Krishnaswamy, Commercial Tax Officer (Int.), Belgaum, under the powers vested in me under section 28(3) of the K.S.T. Act, 1957, seize the following books of account, the details of which are as under :
(1) Katcha cash book for the current Deepavali year written up to 6th March, 1976.
(2) Regular day-book written up to 5th March, 1976.
(3) One small pocket note book written from 1st September, 1975, to 1st November, 1975.
(4) Three tip pen books written respectively from 12th December, 1973, 26th October, 1973, and 16th November, 1974, onwards.
(5) Six diaries written respectively from 1st January, 1976, 27th October, 1963, 1st January, 1974, 2nd December, 1972, 1st January, 1973, and 14th November, 1974, onwards.
(6) One letterhead book written from 9th November, 1973, onwards.
A separate receipt has been issued to the partner present for having seized the above books of account. As no search is made no mahazar is drawn. The partner present has been instructed to attend the office on 15th March, 1976, for verification of the transactions contained in the above books of account.'
The material allegation made by the petitioner in the writ petition reads as follows :
'On 10th March, 1976, the second respondent raided the business premises of the petitioner at 6-30 P.M. along with a number of their official including Commercial Tax Officers and Commercial Tax Inspectors and Conducted a most unreasonable search, ransacked the entire business premises and thereafter seized a number of documents and books of account and loose sheets. The search of the premises and cupboards, in spite of objections made, went ahead. The second respondent had neither brought any local inhabitants to witness the search nor has made any record of search. No reasons are recorded before resorting to the search. Thus, the entire search has been in sheer disregard of the law. The second respondent did not examine any of the books or the documents, but simply seized the available loose sheets collected from the waste paper basket, cupboards, rough calculation slips, etc. There was no warrant of search brought by the second respondent. The search is therefore an illegal act and violative of the provisions contained in section 28(2) of the K.S.T. Act and the provisions of the Code of Criminal Procedure.'
3. As state above, it is not in dispute that the date of the impugned action is 10th March, 1976. Apart from questioning the legality of the search and seizure, the petitioner has also questioned the competence of the respondent before whom admittedly no assessment proceedings relating to the petitioner's firm were pending, to make the search and also the legality of the retention of the books for such a long period. The petitioner has prayed for the issue of a writ of mandamus to the respondent to return to the petitioner all the seized articles, documents and all copies or notes made from the seized documents.
4. No statement of objection has been filed in the case. A memo was filed on 22nd September, 1977, on behalf of the respondent which is signed by the High Court Government Pleader, who is the Advocate for the respondent, which was also not supported by any affidavit of the respondent. After the case was partly heard and after the above infirmity was pointed out, an affidavit dated 6th January, 1978, is filed swearing to the contents of the memo. This affidavit is also not sworn to by the respondent. The same is sworn to by one Smt. K. Ramamani, an Assistant Commercial Tax Officer, working in the office of the Commissioner of Commercial Taxes at Bangalore. Para 5 of the memo, which deals with the allegations made by the petitioner, set out earlier, reads as follows :
'The respondent has not conducted any search on 10th March, 1976, as has been alleged by the petitioner. The documents were found and seized during the course of the inspection of the petitioner's business premises under section 28 of the Act and no search was conducted. Since there was no search conducted on 10th March, 1976, there was no need to follow the procedure as contemplated under the provisions of the Criminal Procedure Code.'
In the above para there is no assertion that the conditions precedent for the making of search and seizure as laid down in the proviso to sub-section (2) of section 28 of the Act has been complied with. But what is stated is that there was no search but documents found during inspection were seized.
5. The petitioner's counsel urged the following contentions :
(1) Search and seizure of the account books is illegal as being in contravention of sub-section (2) of section 28 of the Act.
(2) The respondent was not authorised to conduct the search and seizure as no assessment proceedings of the petitioner's firm were pending before him.
(3) Retention of the account books for such a long period was contrary to law.
(4) The permission said to have been granted by the Deputy Commissioner of Commercial Taxes, Belgaum, is illegal as he is not the next higher officer as contemplated by sub-section (3) of section 28 of the Act and, in any event, the permission granted without hearing him on each occasion as also the permission granted on a few occasions was after a few days after the expiry of the period for which permission was granted on an earlier occasion.
6. In support of the first contention, the learned counsel for the petitioner submitted that what the respondent did was really search and seizure and as such action was taken by the respondent without following the mandatory safeguards prescribed in the proviso to sub-section (2) of section 28 of the Act, the consequence of such illegal action is sought to be averted by resorting to explain away the impugned action as only an inspection and seizing of the books without any search. He submitted that irrespective of the 'name' sought to be given by the respondent to his impugned action, it was a clear case of search and seizure, and as, admittedly, the procedural safeguards set out in the proviso to sub-section (2) of section 28 of the Act have been violated, the petitioner is entitled to the relief claimed for in the petition.
7. Elaborating the point, he submitted that but for the procedural safeguard provided in the proviso to sub-section (2) of section 28 of the Act, the second itself would have suffered the vice of unconstitutionality, viz., violation of article 19(1)(f) and (g) of the Constitution, as observed by the Supreme Court while considering the constitutional validity of a similar provision in the Madras General Sales Tax Act (see Board of Revenue, Madras v. R. S. Jhaver : 66ITR664(SC) . He pointed out that the safeguard provided in that provision as well as section 28 of out Act is the same, viz., provision of section 165 of the Criminal Procedure Code is made applicable and, therefore, without first forming an opinion as to the necessity of search and seizure on the basis of relevant and reliable information, there is no competence to make search and seizure. As already pointed out, it is not the case of the respondent that any such condition procedure for the exercise of search and seizure was present in the case.
8. As regard the contention of the respondent that this was only a case of inspection, the petitioner made an alternative submission. Firstly, he submitted that clause (i) of sub-section (2) of section 28 of the Act confers power of inspection and clause (ii) of sub-section (2) thereof confers power of search for purposes of inspection and the safeguard provided in the proviso is in respect of all searches. His contention is that the word 'inspection' includes search, as the power of search is conferred for the purposes of inspection. He relied on the following observations of the Supreme Court in the decision cited earlier at page 62 in para 6 (pages 460-461 of 20 S.T.C.), while considering analogous provisions of the Madras General Sales Tax Act, which reads as follows :
'It is true that generally speaking a power to inspect does not necessarily give power to search. But where, as in this case, the power has been given to inspect not merely accounts, registers, records and other documents maintained by a dealer but also to inspect his offices, shops, godowns, vessels or vehicles, it follows that the empowered officer would have the right to enter the offices, etc., for purposes of inspection. Naturally his inspection will be for purposes of the Act, i.e., for the purposes of seeing that there is no evasion of tax. If therefore during his inspection of offices, etc., the empowered officer finds any accounts, registers, records or other documents in the shop, those accounts, etc., will also be open to inspection. Reading therefore these two provisions together, it is clear that the empowered officer has the right to enter the officer, etc., and to inspect them, and if on such inspection he finds accounts, etc., he has also the power to inspect them and to see if they relate to the business. These two powers taken together in our opinion means that the empowered officer has the power to search the office, etc., and inspect accounts, etc., found therein. Though therefore the word 'search' has not been used in sub-section (2) these two powers of entering the offices, etc., for inspection and of inspecting every kind of account maintained by a dealer with respect to his business together amount to giving the officer concerned the powers to enter and search the offices, etc., and if he finds any account in the offices, shops, etc., to inspect them. Otherwise we can see no sense in the legislature giving power to the empowered officer to enter the offices, etc., for the purpose of inspection as the officer concerned would only do so for the purpose of finding out all accounts, etc., maintained by the dealer and if necessary to inspect them for the purposes of the Act. We cannot therefore agree with the High Court that there is no power of search whatsoever in sub-section (2) because the sub-section in terms does no provide for search.'
On the above basis, he submitted that the so-called inspection said to have been done in this case is clearly a search of the business premises of the petitioner and seizure of the account books as a result of such search. Alternatively, it was urged that in view of the facts of this case and the specific averments made by the petitioner in the writ petition, which have not been controverted, it has to be held that the seizure of account books in the present case is only the result of search, even accepting the distinction between inspection and search. The petitioner relied on a Division Bench decision of this Court in Harikishandas Gulabdas & Sons v. State of Mysore ( 27 S.T.C. 434.). In the said case in which also a similar search and seizure was challenged, the stand taken by the respondents was that it was only a case of inspection and during the course of such inspection, the petitioner therein voluntarily handed over some account books which were seized. A statement also was taken from the party to the effect that he voluntarily handed over the books. Notwithstanding the appearance of 'inspection' sought to be given by the authority, the court came to the conclusion that it was in fact and in truth a clear case of search and as the procedural safeguards did not precede the search, the relief sought for was granted.
9. Smt. P. G. Gowri, the learned High Court Government Pleader, appearing for the respondent strenuously urged for the acceptance of the stand of the respondent. She strongly relied on the contends of the impugned order itself which, according to her, shows that the action impugned in the writ petition is only 'inspection' in unmistakable terms. She pointed out that there is a clear distinction between 'inspection' and 'search' and it is only for 'search' or inspection including search that the procedural safeguards prescribed in the proviso to sub-section (2) of section 28 of the Act applies. She received support for her submission from the observations in another Division Bench decision of our Court in G. M. Agadi & Brothers v. Commercial Tax Officer, Enforcement, Northern Zone, Belgaum ( 32 S.T.C. 243 at 245.). The observation reads as follows :
'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. It implies a prying into hidden places for that which is concealed. If the object sought for is always in plain sight, then there is no search. If the private account books had been kept in the counter openly at all times and they could have been found on inspection at any time of the day, then the seizure of such account books cannot be said to have been made after a search.'
It is unnecessary to examine in this case as to whether there can be inspection and seizure of account books without search. Therefore, I proceed to examine this case accepting the difference between 'inspection' and 'search' as pointed out for the respondent and supported by the observations in the judgment aforesaid. In the said case also, on the question of fact, the court recorded a finding that it was a case of search rejecting the contention of the department that it was only a case of inspection. As referred to earlier in the first case also (Harikishandas Gulabdas & Sons v. State of Mysore ( 27 S.T.C. 434.)), the court refused to accept the stand of the department that it was a case of voluntary handing over of account books in the course of an inspection.
10. Coming to the present case, it is no doubt true, as pointed by the Advocate for the respondent, that in the impugned order, which is extracted earlier, the respondent has stated that he conducted inspection and during the course of inspection he noticed the account books in question and seized them as he found some inconsistency between the entries in those books and regular account books. But it should be pointed out that it is the correctness of the statements made in that order and the order that is in question in the writ petition. The petitioner has specifically averred that the respondent raided the business premises of the petitioner at 6-30 P.M. on 10th March, 1976, along with several other officers and ransacked the entire business premises and searched the cupboards in spite of protest and seized some of the account books. The petitioner has also averred that there was no search warrant and the procedural safeguards, which are conditions precedent for the 'search', were not complied with. No statement of objection has been filed by the respondent. Even in the memo filed, the allegations made by the petitioner have not been specifically denied or traversed, and there is only a statement in para 5 that the books were seized in the course of inspection. This memo is also not supported by an affidavit of the respondent or any other officer who was present at the time of the alleged inspection. An affidavit of an Assistant Commercial Tax Officer working in the head office at Bangalore is filed, who has no personal knowledge as to what happened on 10th March, 1976, when the respondent when to the business premises of the petitioner along with other offices of the department. Hence it has to be held that the allegations made by the petitioner remain uncontroverted by the respondent. In the case an order which was similar in nature, the claim made that it was the result of inspection only, and not search, was rejected by this court in Kangala and Company v. Commercial Tax Officer (Int.) ( 41 S.T.C. 296.) (W.P. No. 5424 of 1977 decided on 10th October, 1977), and the seized documents were directed to be returned together with notes taken from the seized documents.
11. In the circumstances, I have no hesitation in holding that there is no substance in the stand taken on behalf of the respondent that what was done on 10th March, 1976, at the business premises of the petitioner was only an inspection. The fact that the respondent, before whom no assessment proceedings of the petitioner's firm were pending, went to the business premises of the petitioner at the closing hours of business at 6-30 P.M. and had taken a few other officers along with him and seized some of the account books, together with the absence of contradiction of the serious allegations made by the petitioner by the respondent through a proper statement of objections supported by his affidavit as also affidavits of other officers present at that time, lead to the inevitable conclusion that the impugned action is a clear case of search and seizure and the 'camouflage' of inspection is sought to be given by the respondent, with the object of escaping the consequence of law as admittedly, the procedural safeguards guaranteed by the proviso to sub-section (2) of section 28 of the act was not followed :
12. The powers given to the officers in section 28 of the Act and in the other provisions of the Act authorities the officers to take action against registered dealers for violation of the law are certainly intended for the proper enforcement of the sales tax law and designed in the public interest. At the same time it should be remembered that the procedural safeguards are also of equal importance because the fundamental rights of individuals under article 19 could only be subjected to reasonable restriction in the public interest and the procedural safeguards are meant to protect the individual's right without affecting the public interest. Therefore, while the officers have a duty to exercise their powers conferred by law and safeguard the public interest, they must also respect the restrictions imposed by the very law which gives them the power. In the present case, the respondent, even accepting that he was the competent officer to make the inspection including search, has failed to comply with the mandatory procedural safeguards to which the petitioner is entitled to under the proviso to sub-section (2) of section 28 of the Act. Therefore, my conclusion is that the impugned action was really search and seizure and, therefore, the petitioner is entitled to the relief claimed in the petition. As I am accepting the first contention urged for the petitioner and it is sufficient for the disposal of the case, it is unnecessary to deal with the other contentions.
13. Before concluding, it has to be observed that I gave time to the respondent on 20th December, 1977, suggesting that the seized books may be returned to the petitioner after receiving an undertaking from the petitioner that the petitioner would procedure those books at any time, the respondent wanted the production of those books to which the counsel for the petitioner was agreeable. But when the case came up for hearing on 5th January, 1978, it was submitted on behalf of the respondent that he was not agreeable to return the seized books, etc., even on such undertaking by the petitioner and it was thereafter I proceeded to hear the writ petition.
14. For the reasons state above, the rule is made absolute. Respondent is directed to return all the seized articles which are set out in the impugned order together with copies or notes made, if any, from the seized documents within fifteen days from today.
15. The petitioner is entitled to the costs of the petition. Advocate's fee Rs. 100.
16. Petition allowed.