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Agrawal Engineering Stores and ors. Vs. the State of Uttar Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case Number Civil Misc. Writ Nos. 851 and 1040 of 1970
Judge
Reported in[1972]29STC446(All)
AppellantAgrawal Engineering Stores and ors.
RespondentThe State of Uttar Pradesh and ors.
Appellant Advocate R.R. Agarwal, Adv.
Respondent Advocate Standing Counsel
Cases ReferredIn Balwant Singh v. R. D. Shah
Excerpt:
- - ) the best judgment assessment should be made by the assessing authority after receiving the report from the sales tax officer (s......with certain exceptions (which are not material in these cases), the documents seized during an illegal search cannot be used in a criminal proceeding against an accused from whose custody the documents have been seized : weeks v. united states (1913) 58 l.ed. 652 silverthorne lumber company v. united states of america (1919) 64 l. ed. 319 and massiah v. united states (1964) 12 l. ed. (2d) 246. in weeks (1913) 58 l.ed. 652 and silverthorne (1919) 64 l. ed. 319 the exclusionary rule is binding on the federal courts for the iv and v amendments to the u.s.a. constitution. those amendments have no analogue in our constitution. the said two cases apply the rule to the federal jurisdiction. in mapp v. ohio (1961) 6 l. ed. (2d) 1081 the u.s.a. supreme court extended the rule to the state.....
Judgment:

S.N. Dwivedi, J.

1. These two petitions proceed on similar facts and raise common questions of law. So we are deciding them by a common judgment.

2. The petitioners are dealers under the Sales Tax Act (hereinafter called the 'Act'). Their business premises were searched, and the searching party seized certain documents. The search and seizure of documents was made in the purported exercise of power under Section 13(3) of the Act. The petitioners challenge the legality of the search and seizure of documents.

3. Sri Raja Ram Agarwal, counsel for the petitioners, has raised these points;

(i) the search and seizure of documents, having been made by an Assistant Sales Tax Officer, is illegal;

(ii) the administrative instructions issued by the Commissioner of Sales Tax on 1st April, 1967, are illegal; and

(iii) the information elicited from the seized documents cannot be used as evidence in the assessment proceedings against them.

4. We shall examine these arguments serially.

5. As regards the first point, it is not disputed that the search and seizure of documents was made by an Assistant Sales Tax Officer. In Agrawal Engineering Stores v. State of Uttar Pradesh 1971 A.L.J. 447 it was held by a Full Bench of this court that an Assistant Sales Tax Officer is not authorised to make a search under Section 13(3) of the Act. Accordingly, the search and seizure of documents in these two cases is illegal.

6. Coming to the second point, the administrative instructions issued by the Commissioner of Sales Tax on 1st April, 1967, are to this effect:

The assessing authority should give due weight to the estimate given by the Sales Tax Officer (Special Investigation Branch). In case the assessing authority differs substantially with the estimate of the Sales Tax Officer (S.I.B.), it should seek clarification from the Sales Tax Officer (S.I.B.) and then record reasons for differing with his estimates.

7. The instructions go on to say :

The assessing authority of ten makes adverse comments on the reports of the Sales Tax Officer (S.I.B.) in the assessment order itself. It is said that it is highly undesirable. The assessing authority is asked to refrain from making such comments. In the event of his disagreeing with the report of the Sales Tax Officer (S.I.B.) he may make a separate reference either to the Assistant Commissioner (Executive) or the Assistant Commissioner (S.I.B.), Headquarters, seeking guidance.

8. Furthermore the instructions say :

Where definite figures are reported by the Sales Tax Officer (S.I.B.) the best judgment assessment should be made by the assessing authority after receiving the report from the Sales Tax Officer (S.I.B.). The Range Assistant Commissioner (Executive) would have to exercise greater control on the assessing authorities with a view to ensure that all available data has been utilised by the assessing authority and in that event minimise the chances of under-assessmelit.

9. The assessing authority constituted under the Act is a quasi-judicial authority. He is to act on his self-dependent and self-guided judgment. No outside authority can control or sway his judgment. The administrative instructions, which we have summarized earlier, abridge the independent judgment of the assessing authority. Accordingly we are of opinion that the administrative instructions are illegal. The assessing authority should not, be guided by the instructions and should make orders under the Act in the light of his own independent judgment.

10. We now come to the last question. The argument of Sri Raja Ram Agarwal is that any information gathered by the searching party from the seized documents of the petitioners cannot be used as evidence in the assessment proceedings against them. In support of his argument he has heavily relied on certain American decisions. It appears to us that courts in America are now inclined to take the view that with certain exceptions (which are not material in these cases), the documents seized during an illegal search cannot be used in a criminal proceeding against an accused from whose custody the documents have been seized : Weeks v. United States (1913) 58 L.Ed. 652 Silverthorne Lumber Company v. United States of America (1919) 64 L. Ed. 319 and Massiah v. United States (1964) 12 L. Ed. (2d) 246. In Weeks (1913) 58 L.Ed. 652 and Silverthorne (1919) 64 L. Ed. 319 the exclusionary rule is binding on the federal courts for the IV and V Amendments to the U.S.A. Constitution. Those amendments have no analogue in our Constitution. The said two cases apply the rule to the federal jurisdiction. In Mapp v. Ohio (1961) 6 L. Ed. (2d) 1081 the U.S.A. Supreme Court extended the rule to the State jurisdiction. Extension was made through the medium of the Due Process Clause of the Fourteenth Amendment to the U.S.A. Constitution. We have no Due Process Clause in our Constitution. So we think that the American cases are not helpful guides in the decision of the third question before us. Sri Agarwal has also referred us to certain passages in 29 American Jurisprudence (2d) paragraphs 410, 411, 412 and 415 at pages 469, 470, 471, 472 and 474. These paragraphs summarize the effect of various decisions of the U.S.A. Supreme Court. In paragraph 411 it is stated that recently the U.S.A. Supreme Court has been proceeding on the theory that the exclusionary rule was announced by that court in the Weeks case1, in exercise of its supervisory power over the administration of criminal justice in the federal courts. It seems to us that this theory will not explain the extension of the exclusionary rule to the States. The exclusionary rule applies to State courts on account of the Due Process Clause. So, in our judgment, the exclusionary rule in America is essentially founded on certain constitutional provisions which, as already stated, have no analogue in our Constitution.

11. Sri Agarwal also sought to rely on foot-note (s) at page 266 of Hals-bury's Laws of England (Third Edition). The foot-note states that documents relating to a tax offence which were procured by inducement were inadmissible. The foot-note definitely does not help Sri Agarwal. But he said that there is no reference to inducement in the precedent relied on in support of the foot-note. The case relied on for the foot-note is R v. Barker, [1941] 2 K.B. 391. We have examined the decision and we are of opinion that the decision is noted on inducement. Evidence obtained by inducement will, we think, be as if a confession and is, in certain circumstances, liable to be excluded even in our country.

12. The question arising before us was considered by the Privy Council in Kuruma v. The Queen, [1955] A.C. 197. Lord Goddard said :

In their Lordships' opinion the test to be applied in considering whether the evidence is admissible is whether it is relevant to the matters in issue. If it is, it is admissible and the court is not concerned with how the evidence was obtained.

13. After discussing various cases Lord Goddard reiterated :

In their Lordships' opinion, when it is a question of the admission of evidence strictly it is not whether the method by which it was obtained is tortious but excusable but whether what has been obtained is relevant to the issue being tried.

14. The question was again considered by the Privy Council in Herman King v. The Queen, [1968] 3 W.L.R. 391. The argument there was that the evidence illegally obtained against the accused should be excluded as it was obtained in violation of the constitutional rights secured by the Jamaican Constitution. Rejecting the argument Lord Hudson said :

This constitutional right may or may not be enshrined in a written Constitution, but it seems to their Lordships that it matters not whether it depends on such enshrinement or simply upon the common law as it would do in this country. In either event the discretion of the court must be exercised and has not been taken away by the declaration of the right in written form.

15. The law on the point in England is summarized in Halsbury's Laws of England (Third Edition), Volume 15, paragraph 487 at page 266 :

Although it is the duty of the court to reject, the evidence which is not relevant or admissible, the fact that relevant evidence has been obtained improperly does not necessarily render such evidence inadmissible. Thus chattels which have been seized as the result of an unlawful search may be adduced in evidence unless in criminal cases the Judge exercises his discretion to exclude them....

16. In Income-tax Officer v. Firm Madan Mohan Damma Mal, [1968] 70 I.T.R. 293 Bishambhar Dayal, J., was of opinion that evidence obtained through illegal search may be used in assessment proceedings.

17. In Balwant Singh v. R. D. Shah, [1969] 71 I.T.R. 550 the Delhi High Court has taken the same view.

18. As in our country there is no constitutional impediment in the way of using the evidence obtained through illegal search and as the common law permits the user of such evidence with certain exceptions (which are not material in these cases) we are unable to understand why such evidence should be excluded from consideration in assessment proceedings under the Act. We should not be understood to have given our approval to the use of evidence obtained by third degree methods in assessment proceedings.

19. The petitioners have claimed these reliefs :-

(i) the report of the Assistant Sales Tax Officer (S.I.B.) in respect of the search and seizure of documents effected by him should be quashed ;

(ii) the Sales Tax Officer should be restrained from utilizing the confidential report submitted by the 4th respondent in the assessment proceedings against the petitioners; and

(iii) any other suitable writ, order or direction as this court may deem fit and proper in the case be issued.

20. Having regard to the view taken by us on the third question raised before us we cannot grant the first two reliefs. We think that the purpose of the petitioners would be served if it is declared that the search and seizure of documents effected by the 4th respondent was illegal. As we have already held that the administrative instructions issued by the Commissioner of Sales Tax are illegal, we think we should issue a direction to the Sales Tax Officer restraining him from being guided by the said instructions in the assessment proceedings against the petitioners.

21. In the result the petitions are partly allowed. We grant a declaration that the search and seizure made by the Assistant Sales Tax Officer (S.I.B.) in these two petitions is illegal. We issue an order restraining the Sales Tax Officer (Sector VII, Kanpur) from acting in accordance with paragraph 5(j) of the administrative instructions issued by the Commissioner of Sales Tax by circular No. SS-(S.I.B.) 66-67-2/ST dated March/April 1, 1967. There shall be no order as to costs.


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