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S.K. Bose, Commissioner of Commercial Taxes Vs. the State of West Bengal - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Criminal
CourtKolkata High Court
Decided On
Case NumberCriminal Revision No. 1003 of 1964
Judge
Reported in[1966]18STC429(Cal)
AppellantS.K. Bose, Commissioner of Commercial Taxes
RespondentThe State of West Bengal
Appellant AdvocateB.C. Dutt, Additional Government Pleader and ;S.S. Hajara, Adv.
Respondent AdvocateB. Das, Junior Standing Counsel and ;Asoke Chandra Lahary, Adv.
Cases ReferredBombay v. Laxmichand Narayandas and Anr.
Excerpt:
- .....under article 227 of the constitution of india is directed against the order of the learned chief presidency magistrate, calcutta, dated the 14th august, 1964, rejecting an application of the commissioner of commercial taxes, west bengal, for stay of production of documents specified in a summons under section 94 of the code of criminal procedure dated 23rd july, 1963, before a police officer, in view of the provisions of section 25(3) of the bengal finance (sales tax) act, 1941.2. the material facts are as follows: on the 18th july, 1963, bamdeb das, inspector of police, enforcement branch, calcutta, made an application before the learned chief presidency magistrate in the following terms : tothe chief presidency magistrate, calcutta.re: summons under section 94 cr. p.c. on the.....
Judgment:

D.N. Das Gupta, J.

1. This application under Article 227 of the Constitution of India is directed against the order of the learned Chief Presidency Magistrate, Calcutta, dated the 14th August, 1964, rejecting an application of the Commissioner of Commercial Taxes, West Bengal, for stay of production of documents specified in a summons under Section 94 of the Code of Criminal Procedure dated 23rd July, 1963, before a Police Officer, in view of the provisions of Section 25(3) of the Bengal Finance (Sales Tax) Act, 1941.

2. The material facts are as follows: On the 18th July, 1963, Bamdeb Das, Inspector of Police, Enforcement Branch, Calcutta, made an application before the learned Chief Presidency Magistrate in the following terms :

To

The Chief Presidency Magistrate, Calcutta.Re: Summons under Section 94 Cr. P.C. on the Commissioner ofSales Tax, 14, Beliaghata Road.Sir,

Most respectfully I beg to submit that the files of the dealers mentioned in the annexure lying with the learned Commissioner of Sales Tax will be required for the purpose of investigation into the marginally noted case.

Opinion of the learned Director of Public Prosecution has been obtained to that effect.

I, therefore, pray that summons under Section 94 Cr. P.C. may kindly be issued for service and return, so that we may examine and scrutinise all the papers contanied in the respective files.

3. It may be noted here that in the copy of the said application which has been made annexure to the affidavit-in-opposition on behalf of the State of West Bengal (respondent) no case has been noted in the margin, as stated in the copy of the application.

4. On the 23rd July, 1963, the learned Chief Presidency Magistrate, Calcutta, issued the following summons under Section 94 of the Code of Criminal Procedure :

To

The Commissioner of Commercial Taxes, West Bengal, 14, Beliaghata Road, Calcutta.

(i) Case No. 173 of 1962 (State v. Madanlal Gajanand and Ors.) under Section 465/469/471 I.P.C.

Whereas it appears to this Court that production of the undermentioned documents is necessary for the purposes of the investigation/enquiry/trial/ proceedings under the Code of Criminal Procedure, in the aforesaid matter, and whereas the said documents are believed to be in your possession/power :

You are hereby required to produce or cause to be produced the said documents before Sri Bamdev Das, Inspector E.B., Calcutta by your office on any working day as he may require, during usual office hours, on the 7th day of August, 1963 at 11 A.M.

You are hereby warned that if you, without just excuse, neglect or refuse to attend and produce/produce the said documents/ things, as required by this summons, a warrant will issue to compel your attendance and production/the production of the documents/ things.

Given under my hand and the seal of this Court this 23rd day of July, 1963.

Particulars of the documents/things to be produced.

(1) Sales tax returns, monthly, quarterly, half-yearly or yearly, as the case may be from 1.1.58 to 31.1.63 submitted by the firms as per list attached.

(2) Files of assessment from 1.1.58 to 31.1.63 of the firms as per list attached.

(3) Particulars of C & D declaration forms issued with dates from 1.1.58 to 31.1.63 to the firms as per list attached.

(4) Particulars of registration number of both Central and State of this firm as per list attached.

5. Sub-section (1) of Section 25 of the Bengal Finance (Sales Tax) Act, 1941, makes returns, statements etc. submitted by an assessee confidential and it is in the following terms :-

All particulars contained in any statement made, return furnished or accounts or documents produced in accordance with this Act, or in any record of evidence given in the course of any proceedings under this Act other than proceedings before a Criminal Court, shall, save as provided in Sub-section (3), be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1872, no Court shall, save as aforesaid, be entitled to require any servant of the Government to produce before it any such statement, return, account, document or record or any part thereof, or to give evidence before it in respect thereof.

6. Sub-section (2) of Section 25 prescribes the penalty for violation of the provisions of Sub-section (1) of Section 25. Sub-section (3) provides an exception to the general rule. The portion relevant for the purposes of the instant case will be found in Sub-section (3)(a)(i) of Section 25 and is quoted below :

(3) Nothing in this Section shall apply to the disclosure-

(a) of any of the particulars referred to in Sub-section (1)-

(i) for the purposes of a prosecution under the Indian Penal Code in respect of any such statement, return, accounts, document or evidence, or for the purposes of a prosecution under this Act.

7. Admittedly, the documents which the Commissioner of Commercial Taxes has been asked to produce are not required for the purposes of a prosecution under the Bengal Finance (Sales Tax) Act, 1941. The requisition which was made by the Inspector of Police, Enforcement Branch, before the Chief Presidency Magistrate does not state that the documents were required for the purposes of a prosecution under the Indian Penal Code in respect of any statements, returns, accounts, documents as specified in Sub-section (1) of Section 25. Nor does the learned Chief Presidency Magistrate state in his order that those statements etc. are so required. What the learned Chief Presidency Magistrate has stated in his order is, 'The summons under Section 94 Cr. P. Code was issued, as, in the opinion of this Court, the documents were found necessary for the purposes of a prosecution under different Sections of the I.P. Code.' But the Commissioner of Commercial Taxes cannot be compelled to produce the documents unless they are required for the purposes of a prosecution under the Indian Penal Code in respect of the statements, returns, accounts, documents or evidence. He is not required to produce the documents for the purposes of a prosecution under any and every Section of the Indian Penal Code. Before asking the Commissioner of Commercial Taxes to produce the documents, the learned Chief Presidency Magistrate must be satisfied that the documents are required for the purposes of a prosecution under the Indian Penal Code in respect of the statements, returns, accounts, documents or evidence. It does not appear on a perusal of the order of the learned Chief Presidency Magistrate that he was satisfied that the documents were required for the purposes specified in Section 25(3)(a)(i) of the Bengal Finance (Sales Tax) Act, 1941.

8. Mr. Dutt, learned Advocate appearing for the petitioner, has placed before us two decisions of the Supreme Court relating to the provisions of the Indian Income-tax Act analogous to the provisions of Section 25 of the Bengal Finance (Sales Tax) Act, namely the decision in the case of Charu Chandra Kundu v. Gurupada Ghosh [1961] 43 I.T.R. 83 and the decision in the case of Commissioner of Income-tax, Bombay v. Laxmichand Narayandas and Anr. [1962] 44 I.T.R. 548. The latter mentioned case was cited also before the learned Chief Presidency Magistrate. The provisions of Section 54 of the Indian Income-tax Act are similar to the provisions of the Bengal Finance (Sales Tax) Act. It was held in the case of Commissioner of Income-tax, Bombay v. Laxmichand Narayandas [1962] 44 I.T.R. 548 that Section 54 of the Indian Income-tax Act applies to all documents which form part of the record of assessment proceedings and that it makes no difference whether such documents are produced by the assessee himself or by a third party. The section contains in effect an unconditional prohibition against a public servant producing any such document in a court, and that prohibition does not exclude any criminal process from its operation. The relevant portion of the other Supreme Court case cited above is quoted below:

Mr. Chatterjee appearing on behalf of the appellant contends that Section 54 is enacted only for the protection of the assessee, and if the assessee waives the privilege enacted for his protection, the prohibition contained therein will be inoperative. But there is no such exception, express or implied, in the language used by the Legislature. The prohibition imposed against the Court by Section 54 is absolute : its operation is not obliterated by any waiver by the assessee in whose assessment the evidence is tendered, document produced or record prepared.

9. The learned Chief Presidency Magistrate tried to distinguish the decision reported in Commissioner of Income-tax, Bombay v. Laxmichand Narayandas and Anr. [1962] 44 I.T.R. 548 with the following observations :

The above decision of the Supreme Court is in respect of one aspect of Section 54 of the Income-tax Act. Section 25 of the Bengal Finance (Sales Tax) Act, although couched similar to Section 54 of the Income-tax Act, appears to differ in one very material respect, in that the expression 'in any record of any assessment proceeding or any proceeding relating to recovery of a demand prepared for the purposes of this Act' is not to be found in Section 25 of the Bengal Finance (Sales Tax) Act. The above Supreme Court decision is therefore distinguishable and the petitioner's contention that the documents wanted by the Investigating Officer cannot be produced as forming the basis of the record of assessment proceedings under the (sic) loses all force. There is nothing to indicate that the aforesaid documentsare to be found in any record of evidence given in the course of any proceedings under this Act.

10. It is not clear from the order whether that distinction is at all material so far as the facts of the instant case are concerned. What is material is that the Investigating Officer never told the learned Chief Presidency Magistrate that the statements, returns, accounts, documents or evidence required for the purposes of a prosecution under the Indian Penal Code in respect of the said statements, returns, accounts, documents or evidence, nor did the learned Chief Presidency Magistrate state in his order that those were so required. The petitioner had just excuse for refusing to produce the documents, statements and returns etc., as required by the summons under Section 94, Criminal Procedure Code. Since the summons under Section 94 of the Code of Criminal Procedure was issued by the learned Magistrate without properly applying his mind to Section 25(3)(a)(i) of the Bengal Finance (Sales Tax) Act, his order cannot be sustained and is set aside. This order, however, will not preclude the opposite party from making a fresh application before the learned Chief Presidency Magistrate if the statements, returns etc. are required for the above purpose. If any such application is made, the learned Chief Presidency Magistrate shall dispose of it in accordance with the provisions of law.

11. The Rule is, accordingly, made absolute. Let the records be sent down expeditiously.

T.P. Mukherjee, J.

12. This application is directed against an order of the learned Chief Presidency Magistrate, Calcutta, issued under Section 94 of the Criminal Procedure Code on the Commissioner of Commercial Taxes, West Bengal, for the production of certain documents relating to the assessment of tax on the firm, Madanlal Gaja-nand and others before a police officer investigating into a case under Sections 465/467/471/474/418/120B of the Indian Penal Code. The offence in short is one of forgery and cheating.

13. The Commissioner of Commercial Taxes moved the learned Chief Presidency Magistrate for reconsideration of his order for production of the documents on the ground that Section 25(1) of the Bengal Finance (Sales Tax) Act, 1941, was a bar against disclosure of the papers as directed. The learned Chief Presidency Magistrate having rejected the objection the Commissioner of Commercial Taxes has come up to this Court.

14. The documents the production whereof were required are itemized in an annexure to the affidavit-in-opposition filed on behalf of the respondent. They are certain sales tax returns, the files of assessment of the firm, particulars of declaration forms and particulars of registration numbers.

15. Section 25(1) of the Bengal Finance (Sales Tax) Act above imposes a general ban on certain documents which are declared to be confidential. The Section further puts a restriction on the courts requiring the production of the documents notwithstanding anything contained in the Indian Evidence Act.

16. Section 25(2) of the Act imposes a similar restriction on the servants of the Government against disclosure of the documents mentioned and provides a penalty for disclosure of the documents in violation of the Section. Section 25(3) of the Act, however, contains an exception in so far as it states that if there is a prosecution under this Act or a prosecution under the Indian Penal Code in respect of any of the documents mentioned in Clause (1) of Section 25, the ban imposed by the section would be lifted.

17. The case of the petitioner before us is that there being nothing in the process under Section 94, Criminal Procedure Code, served on him to indicate that there was a prosecution of the firm concerned under the Indian Penal Code in respect of the documents called for from him he would not be justified in law in violating the provision of Section 25 of the Act and that if he has to produce these documents the penalty provided in Clause (2) of Section 25 would be attracted. In support of the contention of the petitioner we were referred to the Supreme Court case, Commissioner of Income-tax, Bombay v. Laxmichand Narayandas and Anr. [1962] 44 I.T.R. 548 which followed an earlier decision of that Court, Charu Chandra Kundu v. Gurupada Ghosh [1961] 43 I.T.R. 83. Both these decisions considered a similar ban contained in Section 54 of the Indian Income-tax Act of 1922. The ban imposed under Section 54 of that Act is almost analogous to the ban imposed by Section 25 of the Bengal Finance (Sales Tax) Act, 1941. It was held that the prohibition contained in Section 54 was absolute in so far as the documents mentioned therein are concerned. The question as to how far that ban is lifted under the circumstances mentioned in Clause (3) of Section 54 of that Act did not come in for consideration and was also not discussed in those cases. The case reported in Commissioner of Income-tax, Bombay v. Laxmichand Narayandas and Anr. [1962] 44 I.T.R. 548 was also referred to before the learned Chief Presidency Magistrate. It was urged before him by the learned lawyer appearing for the Commissioner, Commercial Taxes, that the papers called for having formed part of the record of the assessment of the firm concerned and records of assessment being protected under Section 54 of the Indian Income-tax Act should also be treated as being protected under Section 25 of the Bengal Finance (Sales Tax) Act, 1941. The learned Chief Presidency Magistrate found that there was a distinction between the provisions in the Income-tax Act and those in the Bengal Finance (Sales Tax) Act in so far as the records of assessment which are protected under the former Act are not protected under the latter. In view of the submissions made before him that the other documents called for formed part of the record of assessment of the firm and in view of his finding that the record of assessment is not protected under the Bengal Finance (Sales Tax) Act, 1941, the learned Chief Presidency Magistrate came to the conclusion that those other papers also forming part of that record are not protected against disclosure. It is in that view of the matter that he rejected the application of the Commissioner of Commercial Taxes.

18. In our view the learned Chief Presidency Magistrate fell into an error in coming to the finding that he has arrived at. Records of assessment which are included in Section 54 of the Indian Income-tax Act are, no doubt, not protected under Section 25 of the Bengal Finance (Sales Tax) Act. Neither Section 25(1) of this Act nor Section 25(3) of the Act imposes ban or lifts that ban in so far as records of assessment are concerned. It may be that the other documents required in the case formed part of the record of assessment but those documents are separately mentioned in Section 25(1) of the Bengal Finance (Sales Tax) Act, 1941, and are given protection against disclosure under that provision. This aspect of the matter appears to have escaped the notice of the learned Chief Presidency Magistrate.

19. In our opinion before the Commercial Tax Authorities can be directed by the court to produce any document in connection with a criminal case, the court has to keep in mind the ban against disclosure contained in Section 25(1) of the Bengal Finance (Sales Tax) Act, 1941. Then if it finds that the documents called for are amongst those mentioned therein but are required in connection with a case under the Indian Penal Code in respect of those documents, it is then and then only that the ban would be lifted under Clause (3) of Section 25, and not only that, the fact that the criminal case under the Indian Penal Code is in respect of the documents called for has to be mentioned in the process that may be served on the Commercial Tax Authorities. under Section 25 of the Act it is not only the1 court but also the servants of the Government concerned who will have to be satisfied that the documents which are protected against disclosure under Clause (1) of Section 25 are required for the purposes of a criminal case under the Indian Penal Code in respect of those documents.

20. So far as the present case is concerned we find that there were no materials before the learned Chief Presidency Magistrate to show that the documents required by the Investigating Officer were for the purposes of a prosecution under the Indian Penal Code in respect of those documents. It will appear, therefore, that the learned Chief Presidency Magistrate could not have been satisfied on that score. The summons issued on the Commissioner of Commercial Taxes does not also mention that the case under the Indian Penal Code was in respect of the documents that he was required to produce.

21. I would also like to mention in this connection that out of the documents that the Commissioner of Commercial Taxes was called upon to produce before the Investigating Officer, there were the files of assessment of the firm. It may be that the files of assessment contained the other documents that were all called for. But files of assessment minus those documents are not included within the prohibition against disclosure contained in Clause (1) of Section 25 and in any event the Commissioner of Commercial Taxes could have had no objection for production of the files of assessment minus the documents specifically mentioned in Clause (1) of Section 25.

22. As, however, the order passed by the learned Chief Presidency Magistrate need not be split up in view of the order we are going to pass the entire order should be set aside. I agree with the order passed in the case by My Lord and hold that this Rule must be made absolute.


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