S.N. Dwivedi, J.
1. This Full Bench has been constituted to answer these two questions:
(1) Whether Section 13(3) of the U.P. Sales Tax Act contravenes Articles 14 and 19 of the Constitution ?
(2) Whether, even if Section 13(3) is ultra vires, any material obtained as a result of the search and seizure effected by the sales tax authorities can be utilised while making an assessment against the petitioner
2. Section 13(3) of the Sales Tax Act (hereinbelow called the Act) reads:
If any officer authorised under Sub-section (2) has reasonable grounds for believing that any dealer is trying to evade liability for tax or other dues under this Act, and that anything necessary for the purpose of an investigation into his liability may be found in any account, register or document, he may seize such account, register or document as may be necessary. The officer seizing the account, register or document shall forthwith grant a receipt for the same, and shall be bound to return them to the dealer or the person from whose custody they were seized, within a period of ninety days from the date of such seizure, after having such copies or extracts taken therefrom as may be considered necessary, provided the dealer or the aforesaid person gives a receipt in writing for the account, register or document returned to him. The officer may, before returning the account, register or document, affix his signature and his official seal at one or more places thereon, and in such case the dealer or the aforesaid person will be required to mention in the receipt given by him the number of places where the signature and seal of such officer has been affixed on each account, register or document.
3. The first argument is put in this way : The account, register or documents are the exclusive property of the dealer and this enactment places unreasonable restrictions on his right to hold this property.
4. The need for examination of the nature of the dealer's proprietary right in the account, register or documents mentioned in Section 13(3) is evident. The Act contemplates two broad categories of dealers: (1) those who are liable to pay tax, and (2) those who are not liable to pay tax. The first category is Sub-divided into (i) licensed dealers and (ii) registered dealers. Section 3-E deals with the licensing of dealers. Sub-section (4) of this section casts an obligation on a licensed dealer 'to maintain true and correct accounts of day-to-day transactions of sale and purchase of goods' notified under Section 3-D(l) in an intelligible form and in such manner, if any, as may be prescribed.' He is also obligated to furnish to the assessing authority the details of the aforesaid transactions and other relevant information connected therewith. Section 8-A provides for registration of dealers who are liable to pay tax. Section 12 provides that every dealer who is liable to pay tax, including a dealer who is exempted from tax on payment of fee under the Act 'shall keep and maintain a true and correct account showing the value of the goods sold and bought by him.' Where the accounts maintained by him in the ordinary course do not exhibit a true and correct account in an intelligible form, he 'shall maintain true and correct account in such form as may be prescribed'.
5. Section 8(3) provides that where a Healer recovers from a purchaser any sum as sales tax, he 'shall issue a cash memo, or a credit memo., as the case may be.' The memo, shall be signed by the dealer or his servant or manager or agent and shall be given to the buyer. The memo. shall show separately the price of the goods sold and the amount charged as tax. The dealer 'shall keep a counterfoil duly signed and shall further maintain a true and correct account of all moneys charged by him as tax in the prescribed manner.
6. The licence issued to a licensed dealer incorporates Section 3-E(4) in the form of the conditions of a licence. Rule 24 of the Sales Tax Rules requires the dealer who has been granted exemption from tax 'to maintain separate accounts in respect of the turnover of the goods mentioned in the certificate of exemption.
7. Rule 72 of the said Rules obligates every dealer liable to pay tax and licensed under Section 3-E to 'maintain a true and correct account of all his purchases, sales and stocks showing quantity and value for verification of the accuracy of his turnover.' A manufacturer liable to pay tax is required to maintain stock-books in respect of raw materials as well as products at the various points of production. Rule 73 provides that all accounts including cash memos. and vouchers relating to production, stocks, purchases, deliveries and sales shall be preserved for a period of four years after the close of the year to which they relate. Rule 74 provides that a licensed dealer, who also deals in goods not covered by his licence, shall keep separate accounts for the goods covered by the licence and goods not so covered.
8. Broadly speaking, the foregoing provisions impose a statutory duty on the dealer to maintain true and correct account of his transactions of sale and purchase. Certain other provisions create a corresponding right in certain authorities to inspect those accounts and to take notes therefrom. Section 13(1) provides that any officer not below the rank of an assessing authority and empowered by the State Government in this behalf may require a dealer to produce before him any book, document or account relating to his business and may inspect, examine and copy the same. Section 13(2) provides that all books, documents and accounts maintained by any dealer in the ordinary course of his business, and his office, shop, godowns, vessels or vehicles shall be open to inspection 'at all reasonable times' by such officer not below the rank of an assessing authority as may be authorised by the State Government in this behalf.
9. Section 14(1) creates certain statutory offences. Any person who refuses to permit or refuses or neglects to produce for inspection or examination any book, document or account, or refuses to allow copies to be taken in accordance with Section 13 commits an offence [see Section 14(1)(d)]. Any person who acts in contravention of the Act or the Rules made thereunder also commits an offence [see Section 14(1)(e)]. Section 14(2)(by provides that any person who wilfully maintains or produces false accounts, registers or documents commits an offence.*' On conviction he is liable to be sentenced to a maximum of one year's simple imprisonment or fine, or both. Thus the dealer's statutory duty of maintaining true and correct accounts is enforced by, and the statutory right of inspection of accounts by certain authorities is buttressed with, a statutory sanction.
10. Section 8-A(2) permits a registered dealer to recover from the purchaser the amount of sales tax on the goods sold by him. He would be in the position of a constructive trustee. If the sum recovered from the buyer as tax is not paid to the Government, he will hold it for the benefit of the buyer.
11. The foregoing survey of the provisions of the Act yields the following results : (1) the accounts, registers and other documents mentioned in Section 13(3) are maintained in the prescribed manner or in the manner chosen by the dealer but with the imprimatur of the Act thereon. But for the Act he could have run his business without any accounts. Unlike the accounts of an ordinary person, the accounts, registers and documents so maintained do not remain the purely private property of the dealer; they have become impressed with a quasi-public character. We think that they are in the nature of public documents : (see Wilson v. U.S.A. 55 L. Ed. 771; Jack Davis v. U.S.A. 90 L. Ed. 1453, William Shapiro v. U.S.A. 92 L. Ed. 1787); (2) since the dealer stands in the position of a constructive trustee in respect of the sums recovered as tax from buyers, his accounts, registers and other documents are impressed also with a trust as regards those amounts.
12. In Wilson, 55 L. Ed. 771 the privilege against self-incrimination was not upheld in relation to the books of a corporation. Mr. Justice Hughes said:
The question still remains with respect to the nature of the documents and the capacity in which they are held. It may yet appear that they are of a character which subjects them to the scrutiny demanded and that the custodian has voluntarily assumed a duty which overrides the claim of privilege.... Thus, in the case of public records and official documents, made or kept in the administration of public office, the fact of actual possession or lawful custody would not justify the officer in resisting inspection, even though the record was made by himself and would supply the evidence of his criminal dereliction. If he has embezzled the public moneys and falsified the public accounts, he cannot seal his official records and withhold them from the prosecuting authorities on a plea of constitutional privilege against self-incrimination. The principle applies not only to public documents in public offices, but also to records required by law to be kept in order that there may be suitable information of transactions which are the appropriate subjects of governmental regulation, and the enforcement of restrictions validly established. There the privilege which exists as to private papers cannot be maintained.(emphasis added).' Mr. Justice Hughes then added: Where, by virtue of their character and the rules of law applicable to them, the books and papers are held subject to examination by the demanding authority, the custodian has no privilege to refuse production although their contents tend to incriminate him.
As the corporate books are subject to the visitatorial power of inspection by the State, the privilege against self-incrimination could not be claimed.
13. In Wilson, 55 L. Ed. 771 there is reference to McClay v. Donovan 10 N.D. 203, where the defendant, a druggist, was required by statute to keep a record of all sales of intoxicating liquors made by him. The records were subject to public inspection at all reasonable times. The privilege against self-incrimination was not made available to him for the records were 'public documents which the defendant was required to keep, not for his private uses, but for the benefit of the public, and for public inspection.' The self-same purpose pervades the provisions of the Act before us.
14. 'Of all the fundamental rights the right of property is the weakest' : (Golak Nath v. State of Punjab : 2SCR762 per Hidayatullah, J.). And it seems to us that the dealer's right of property in his accounts, registers and other documents is definitely weaker and is subject to greater control and inspection by statute than the similar right of an ordinary individual, for the former class of documents are of a public nature and are impressed with a trust. It is in this background that the argument founded on Article 19(1)(f) and (g) should have to be examined.
15. The argument is that Section 13(3) confers unguided and arbitrary power. Elaborating the argument counsel said that (1) the power of search and seizure has not been conferred on a high official, (2) that the officer searching and seizing papers is not required to record the reasons for his belief, (3) that no opportunity is given to the dealer affected by the official act to test the legality of the search and seizure either before or after the search and seizure, (4) that there is no provision for appeal against the act of search and seizure, (5) that the expression 'is trying to evade liability for tax' is vague and indefinite, and (6) that neither the provisions of the Code of Criminal Procedure regulating the power of search and seizure have been applied nor like safeguards have been given to the dealer.
16. The last point may easily be disposed of. Article 19(5) does not force the 'reasonable' into a procrustean bed. It is a part of an instrument which is designed to keep the wheels of Government in motion, of necessity, it is not flexless.
The test of reasonableness...should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases' : State of Madras v. V.G. Row  S.C.R. 597 at p. 607. In each case it is necessary to weigh the 'nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, and the disproportion of the imposition' : (Ibid at page 607); R.C. Cooper v. Union of India : 3SCR530 at p. 593.
17. The officer authorised to seize documents is the officer authorised by the State Government to inspect goods and accounts under Sub-section (2) of Section 13. Such officer cannot be below the rank of the assessing authority. According to Rule 6, the Sales Tax Officer is the assessing authority in respect of dealers within his circle. Though according to Rule 2(h) the 'Sales Tax Officer' includes also an Assistant Sales Tax Officer posted in a circle he is, we think, below the rank of the assessing authority. So the power of seizure may be exercised by the Sales Tax Officer or officers superior to him. A Sales Tax Officer is a gazetted officer of provincial rank, and is not a minor official.
18. Sub-section (4) of Section 13 places limitation as to place on the power of seizure. The authorised officer may search 'any office, shop, godown, vessel, vehicle or any other place of business' or 'any building or place where such officer has reason to believe that the dealer keeps or is, for the time being, keeping any accounts, registers or documents....' Firstly, a place of business may be searched. Secondly a vehicle or vessel may be searched. These two kinds of searches may be made as soon as the authorised officer has reasonable grounds for believing that the dealer is trying to evade liability for tax. It may be observed that in the common law no search warrant is required for searching a vehicle or vessel because either can be moved out of the jurisdiction in which a warrant must be sought (47 American Jurisprudence 513). Thirdly, ordinarily residence cannot be searched. A building or place including residence may be searched only if the authorised officer has reason to believe that the dealer keeps documents therein. If he searches building or place which is not a place of business in the absence of reasons for believing that the accounts are there, the search will be illegal. Reasons for belief should exist objectively and may be tested in a court. If the court finds that there did not exist reasons for belief, it may declare the search illegal: (Emperor v. Vimlabai Deshpande ).
19. The power of seizure is also severely limited in several other ways. Firstly, the power may be exercised only when the authorised officer has 'reasonable grounds for believing (1) that any dealer is trying to evade liability for tax' and (2) that anything necessary for the purpose of an investigation into his liability may be found in any account, register or documents. Reasonable grounds for believing both these things should co-exist prior to the making of search and seizure. Reasonable grounds should exist objectively and can be tested in a court. Where the court finds that they did not exist, the search and seizure will be illegal: Emperor v. Vimlabai Deshpande , Barium Chemicals Ltd. v. Company Law Board : 1SCR898 , Rohtas Industries Ltd. v. S.D. Agarwal : 3SCR108 . That the law does not oblige the authorised officer to record the reasonable grounds for his belief is accordingly a weakness of meagre weight.
20. The expression 'trying to evade his liability for tax' is not vague and uncertain. A crime has got four stages: (1) intention, (2) preparation, (3) attempt and (4) act. The expression 'trying to evade' will exclude the first stage. It will include the third stage. In the context with which we are concerned it may also comprehend the second stage. Preparation may sometimes shade off into attempt. Where a dealer maintains two accounts, one true and the other false or suppresses the true accounts, he is in the popular sense trying to evade his liability for tax.
21. As the legality of search and seizure is subject to judicial control in the manner already discussed, the absence of a statutory appeal is not material. It is idle to demand a pre-search judicial review where a dealer is trying to evade his liability. It will frustrate the object of search. It is enough that judicial review is available after the search.
22. The documents seized may be retained by the authorised officer for a maximum period of 90 days and must be returned thereafter to the dealer or the person from whose custody they were seized. He is bound to grant a receipt for the seized documents to either of them.
23. There has been severe criticism of the power to take 'such copies or extracts' from the seized documents as the authorised officer considers necessary for investigating the dealer's liability. But the criticism is unjustified. Firstly, he is under a statutory duty to allow inspection of the business papers. The power to inspect includes the power to take copies and extracts from the papers. Papers are seized under Sub-section (3) to achieve this purpose. Secondly, Section 23 provides that the particulars contained in business papers shall be treated as confidential. The authorised officer cannot disclose them to anyone, and they may be used only for determining his liability for tax. He will not accordingly suffer any harm to his reputation or business.
24. In the end, mention should be made of Rule 82 of the Rules. It empowers the Commissioner of Sales Tax to issue instructions for regulating the procedure to be followed in carrying out the provisions of the Act and the Rules. He can impose further limitations on the power of search and seizure.
25. It is difficult to comprehend how this controlled power of search and seizure of documents will unreasonably abridge the right to carry on business. No specific arguments have been urged on this aspect.
26. To sum up, when we put in the scales the quasi-public nature of the documents of the dealer, his position of a trustee of his buyers from whom he has recovered tax, his statutory duty of maintaining true and correct accounts and of allowing inspection of the said accounts, the breach of his duty amounting to an offence, and various limitation on the power of search and seizure as to the person authorised to search and seize, place and circumstances, we have no doubt in our mind that there is no disproportionate abridgment of the dealer's right of property.
27. In M.P. Sharma v. Satish Chandra  S.C.R. 1077, it was held that Article 19(1)(f) does not imply a guarantee of protection from search without warrant. In Senairam Doongarmal v. K.E. Johnson , it was held by majority that the provisions for search and seizure of documents in the Income-tax Act violated Article 19(1)(f) and (g) of the Constitution. But a contrary view was taken in Surajmull, Nagarmull v. Commissioner of Income-tax : AIR1961Cal578 . It is not necessary to express any opinion on the provisions of the Income-tax Act, which are vitally different in substance and background from Section 13(3). In Wazir Chand v. The State of Himachal Pradesh : 1954CriLJ1029 , search and seizure of goods was made without authority of law. In Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh  S.C.R. 803, the impugned enactment, unlike the one before us, confided unrestricted power to grant, refuse and cancel a licence to carry on trade in coal and was struck down as an unreasonable restriction. In Hamdard Dawakhana v. The Union of India : 1960CriLJ671 , a part of an enactment was found to be vague and unguided. But there is no similarity between that provision and Section 13(3). Hari Chand Sarda v. Mizo District Council : 1SCR1012 is distinguishable for the same reason.
28. In R.N. Abdul Wahab and Co. v. Assistant Commissioner of Commercial Taxes A.I.R. 1968 Mys. 100, Section 28(3) of the Mysore Sales Tax Act was considered to be violative of Article 19(1)(f) and (g). But the case is distinguishable for two reasons. Firstly, there is no discussion about the public and trustee character of the dealer's documents; secondly, Section 28(3) did not specify the rank of the officer and, thirdly, standard of 'reason to suspect' was found to be vague. Section 13(3), on the contrary, specifies the rank of the officers who may be authorised to search and seize documents. It prescribes the common law standard of 'reasonable or probable cause'. Then there are also other differences between the two enactments.
29. Standing Counsel has relied on M.P. Kannan v. State of Kerala : AIR1966Ker143 . In that case Section 17(2-A) of the T.C. General Sales Tax Act, which resembles Section 13(3) of the Act, was held to be consistent with Article 19(1)(f) and (g). He has also relied on Commissioner of Commercial Taxes v. Ramkishan Shrikishan : 1SCR148 which has upheld the constitutionality of Section 41(2) of the Madras General Sales Tax Act which bears some affinity with Section 13(3). There is no discussion in these cases about the character of the dealer's documents.
30. The argument based on Article 14 of the Constitution is developed in this manner. Section 13(2) and (4) and Section 13(3) and (4) operate in similar circumstances. The authorised officer has been given a free hand in picking and choosing one or the other course according to his whim and humour. There is no statutory signal to guide his discretion.
31. Under Section 13(2) and (4) the authorised officer may search out the accounts and inspect them on the spot. He cannot seize and retain them for any time. Under Section 13(3) and (4) he may search out the accounts and seize and retain them for a period of 90 days. Although the two enactments seem to overlap, it appears to us that reasonably interpreted, they deal with different situations. Where on a search in exercise of the power under Section 13(2) and (4) the authorised officer finds accounts which may be inspected conveniently on the spot, he will inspect them at once on the spot. But where the accounts found are voluminous and cannot be instantaneously inspected it is reasonable to allow him to seize them and to retain them for inspection at his reasonable convenience. The power of retaining the documents may be exercised only in such an exigency. So the criterion for the exercise of power is the immensity of inspection. This criterion is reasonably embedded in Section 13(3). Accordingly Section 13(3) does not conflict with Article 14.
32. Counsel has relied on Suraj Mall Mohta and Co. v. A.V. Visvanatha Sastri : 26ITR1(SC) , Shree Meenakshi Mills Ltd. v. A.V. Visvanatha Sastri : 26ITR713(SC) , Anandji Haridas and Co. v. S.P. Kushare : 1SCR661 and Harakchand Ratanchand v. Union of India : 1SCR479 but they are all distinguishable from the provisions of law before us.
33. Our answers to the two questions referred to us are :
Section 13(3) of the Sales Tax Act does not contravene Articles 14 and 19(1)(f) and (g) of the Constitution.
In view of our answer to question No. (1), the second question does not arise.