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Sheonath Prasad and ors. Vs. State of Bihar - Court Judgment

LegalCrystal Citation
SubjectCriminal;Sales Tax
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1968SC1517; 1968(0)BLJR980; 1969CriLJ37; [1969]1SCR150; [1968]22STC488(SC)
ActsBihar Sales Tax Act, 1947; ; Bihar Sales Tax Act, 1959 - Sections 17; Code of Criminal Procedure (CrPC) - Sections 103 and 165(4)
AppellantSheonath Prasad and ors.
RespondentState of Bihar
Excerpt:
.....accounts in which discrepant and incorrect entries were being made from a place which was not the place of business - whether search and seizure was illegal as the power of inspection, seizure and search under section 17 can be exercised only in a place of business declared by the dealer under the act and the rules - the power of inspection, seizure and search under section 17 is not limited to a place of business declared by a dealer in his application for registration or otherwise and that it can be exercised in respect of any and every place of business - in making the inspection, search and seizure x was exercising the powers under section 17 - held, search and seizure made by x was not illegal criminal - seizure - sections 165 and 395 of indian penal code, 1860 and section 103 of..........seizure and search under section 17 of the bihar sales tax act, can be exercised only in a place of business declared by the dealer under the act and the rules and as the gaddi at adrakhghat was not such a place of business, the inspection, search and seizure were illegal and (2) that sharma made the search and seizure in the course of an investigation of a cognizable offence, and as there was contravention of section 165 (4) read with section 103 of the criminal procedure code the search and seizure were illegal. he also pleaded for the mitigation of the sentences.4. our attention was drawn to the relevant provisions of the bihar sales tax act, 1947 and the bihar sales tax rules, 1949. section 17 of the act reads:'production and inspection of accounts and documents and search of.....
Judgment:

R.S. Bachawat, J.

1. Nine persons were tried for various offences by the 3rd Assistant Sessions fudge, Patna. The judge acquitted Ramnath and Madan of all charges. He convicted Sheonath, Matukdeo and Sarjoo under Section 353 of the Indian Penal Code and sentenced them to pay a fine of Rs. 1000 each or in default to suffer imprisonment for six months. He convicted Satnarayan, Billat, Gullal and Bishwanath under Section 353 read with Section 149 and sentenced them to pay a fine of Rs. 200 each or in default to suffer simple imprisonment of three months. He convicted all of them under Section 147 but did not pass a separate sentence under it. He acquitted all of them of the charge under Section 395. The State of Bihar filed an appeal and a revision petition for enhancement of the sentence. The High Court allowed the appeal and revision petition in part. It convicted Sheonath, Matukdeo and Sarjoo under Section 395 and sentenced them to undergo rigorous imprisonment for two years each, enhanced the sentences already imposed on them under Section 353 by adding a sentence of two years rigorous imprisonment against each of them and directed that the substantive sentences of imprisonment would run concurrently. It convicted Satnarayan, Billat and Gullat of offences under Section 395 and sentenced them to undergo rigorous imprisonment for one year each, enhanced the sentence imposed upon them under Section 153/149 by adding sentences of one year's rigorous imprisonment against each of them and directed that the substantive sentences of imprisonment would run concurrently. It acquitted Bishwanath of all the charges. Sheonath, Matukdeo, Sarjoo, Satnarayan, Billat and Gullat have filed this appeal after obtaining special leave from this Court.

2. The courts below have found the following facts: Maheshwar Datta Sharma was the Superintendent of Commercial Taxes (Intelligence Branch) exercising the powers of Assistant Supdt. of Sales Tax. He received information that the firm of Mohanlal Sitaram was maintaining incorrect account books at its secret gaddi at Adrakhghat, Marufganj in Patna City. In the afternoon of May 7, 1959 he with a party of officers and inspectors of the Sales Tax Department raided the premises. After posting guards at the entrance and with the rest of the party he went upstairs. In the eastern room he found the munims Sarjoo Prasad and Matukdeo writing books of account. On an examination of the books of account and papers he found that double sets of books of account with discrepant and incorrect entries were being maintained with a view to evasion of sales tax. He seized the books and papers and packed them in a gunny bag. A seizure list was prepared. A copy of the list was offered to Matukdeo who refused to accept it. In the meantime a mob with the common intention of snatching away the seized books of account came upstairs. At the sight of the mob Sharma and some members of the party bolted the door of the closed verandah. Gullat, Billat and Satnarayan and other members of the mob attempted to break open the door of the verandah. Sharma and his party then went inside the central room with the bag containing the seized account books and bolted the door from inside. The mob broke open a door of the eastern room and went inside to the central room. There Sheonath, Matukdeo and Ramnath snatched away the bag from the possession of Sharma. It may be mentioned that Sheonath was the proprietor of the firm. These findings of fact are not challenged by Mr. Chari.

3. The courts below found that the inspection, search and seizure were made by Sharma in the exercise of his powers under Section 17 of the Bihar Sales Tax Act 1947. Mr. Chari attacked this finding. He contended that (1) the power of inspection, seizure and search under Section 17 of the Bihar Sales Tax Act, can be exercised only in a place of business declared by the dealer under the Act and the Rules and as the Gaddi at Adrakhghat was not such a place of business, the inspection, search and seizure were illegal and (2) that Sharma made the search and seizure in the course of an investigation of a cognizable offence, and as there was contravention of Section 165 (4) read with Section 103 of the Criminal Procedure Code the search and seizure were illegal. He also pleaded for the mitigation of the sentences.

4. Our attention was drawn to the relevant provisions of the Bihar Sales Tax Act, 1947 and the Bihar Sales Tax Rules, 1949. Section 17 of the Act reads:

'Production and inspection of accounts and documents and search of premises:--

(1) The Commissioner may, subject to such conditions as may be prescribed, require any dealer to produce before him any accounts or documents, relevant to the financial transactions of a dealer, including accounts or documents relating to profits derived from the business of any firm, or to furnish any information relating to the stocks of goods of, or purchases, sales and deliveries of goods by, the dealer as may be necessary for the purposes of this Act.

(2) All accounts, registers and documents relating to the stocks of goods of, or purchases, sales and deliveries of goods by, any dealer and all goods kept in any place of business of any dealer shall at all reasonable times be open to inspection by the Commissioner.

(3) If the Commissioner has reason to suspect that any dealer is attempting to evade the payment of any tax due from him under this Act, he may, for reasons to be recorded in writing seize such accounts, registers or documents of the dealer as may be necessary, and shall grant a receipt for the same, and shall retain the same only for so long as may be necessary for examination thereof or for a prosecution.

(4) For the purposes of Sub-section (2) or Sub-section (3) the Commissioner may enter and search any place of business of any dealer.'

5. Section 3 empowers the State Government to appoint any person to assist the Commissioner of Sales Tax. Section 9 provides for registration of dealers. Section 11 provides for publication of the list of registered dealers. Section 18 authorises the State Government to delegate the powers of the Commissioners to any officer appointed under Section 3 to assist him. Section 19 requires a registered dealer or any other dealer to whom a notice is served under Section 12 (1) to give information of any change of his place of business or the opening of a new place of business. The maintenance of incorrect accounts is cognizable offence punishable under Section 26 (1) (g). Under Section 27 the Commissioner may authorise any person appointed to assist him under Section 3 to investigate offences punishable under the Act. Any person so authorised is required in the conduct of such investigation to exercise the powers conferred by the Criminal Procedure Code upon an officer in charge of a police station for the purpose of investigation of a cognizable offence. Rule 2 (1) defines 'place of business' to mean any place where a dealer sells goods or keeps accounts of sales. Rule 3 provides that an Assistant Commissioner of Sales Tax and a Superintendent of Sales Tax may be appointed under Section 3 (1) to assist the Commissioner. Rule 4 provides that an application for registration shall be in Form 1. The proviso to Rule 4 provides that a dealer other than a dealer registered under Rule 10 (1) having more than one place of business shall make a separate application in respect of every such place. Rule 10 (1) provides for registration of dealers in special circumstances, Form 1 requires the dealer to state the location of the place of business for which the application is made, a complete list of warehouses in respect of the place of business and a complete list of other places of business of the dealer for which a separate application has been or will be made. Under Rule 5 a certificate of registration is issued in Form II. That form gives the location of the place of business, and warehouses of the dealer. Rule 11 provides for publication of lists of registered dealers. The lists give the location of their places of business.

6. It is to be noticed that in the application for registration a dealer is required to disclose his place of business. The place of business disclosed by him is mentioned in the certificate of registration and the list of registered dealers. But the Act and the Rules nowhere say that if he has some other place of business, such place cannot be regarded as a place of business. On the contrary, Rule 2 (1) defines 'place of business' to mean any place where a dealer sells goods or keeps accounts of sales. The dealer Mohanlal Sitaram kept accounts of sales at his secret gaddi at Adrakhghat. The gaddi was therefore a place of business of the dealer. The Commissioner could inspect the books under Section 17 (2), seize them under Section 17 (3) and enter and search the place under Section 17 (4). The power of the Commissioner under Section 17 was delegated to Sharma under Section 18. He could therefore lawfully exercise those powers. We see no ground for holding that the power under Section 17 can be exercised only in relation to a place of business declared by the dealer in his application for registration. It is the duty of the dealer to declare all his places of business. If he has more than one place of business he is required to disclose them and to make a separate application for every such place. If he changes the place of business or opens a new one he is required to give information to the prescribed authority. The non-disclosure of a place of business does not make that place immune from entry and search under Section 17. The power under Section 17 can be exercised in relation to any dealer whether registered or unregistered. An unregistered dealer is not exempt from the operation of Section 17 though he made no application for registration declaring his place of business. We are of the opinion that the power of inspection, seizure and search under Section 17 is not limited to a place of business declared by a dealer in his application for registration or otherwise and that it can be exercised in respect of any and every place of business. When a certain place is declared by the dealer as his place of business he cannot be heard to say at a later stage that it is not his place of business. If the Commissioner enters and searches any other place, he does so at his own peril. If it turns out that that place is not place of business of the dealer the Commissioner will be guilty of trespass.

7. We are not satisfied that Sharma made the search and seizure in the course of an investigation of a cognizable offence. Sharma stated that he was not authorised by the Commissioner under Section 27 to investigate an offence. That is why he did not reduce to writing the information given to him that the dealer was maintaining incorrect accounts and did not require the informant to sign a written information. Only the powers of the Commissioner under Section 17 was delegated to Sharma. In making the inspection, search and seizure he was exercising the powers under Section 17. He was not investigating or dealing with an offence. The provisions of Section 165 (4) read with Section 103 of the Criminal Procedure Code were therefore not attracted and he was not required to comply with those provisions.

8. On the question of sentence, we find that both the courts have said that the offence of dacoity was a technical one. The appellants did not cause hurt to any member of the raiding party. The appellants have already undergone imprisonments for about a month. We think that the ends of justice will be met by reducing the sentences imposed by the High Court to the periods of imprisonments already undergone by the appellants.

9. In the result, the appeal is allow ed in part. The convictions of the appellants by the courts below including their convictions by the High Court under Section 305 are affirmed. The sentences under Section 305 and the enhanced sentences in respect of other of fences imposed on the appellants by the High Court are reduced to the period of imprisonment already undergone by them. The sentences imposed on the appellants by the 3rd Assistant Sessions Judge, Patna, are maintained.


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