Madras High Court
V.V.V.R.Sathyam vs The Superintendent (Stu) on 1 October, 2010
Author: K.Chandru
Bench: K.Chandru
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01/10/2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD).No.12390 of 2010 W.P.(MD).No.12391 of 2010 W.P.(MD).No. 12392 of 2010 & M.P.(MD).Nos.1, 1 & 1 of 2010 V.V.V.R.Sathyam Ex-Partner of M/s.V.V.Vanniaperumal & sons, 443, Bazaar, Virudhunagar-626 001. .. Petitioner in W.P.(MD).No.12390/2010 V.V.V.R.Thendral Ex-Partner of M/s.V.V.Vanniaperumal & sons, 443, Bazaar, Virudhunagar-626 001. .. Petitioner in W.P.(MD).No.12391/2010 V.V.V.R.Muthu Ex-Partner of M/s.V.V.Vanniaperumal & sons, 443, Bazaar, Virudhunagar-626 001. .. Petitioner in W.P.(MD).No.12392/2010 Vs. The Superintendent (STU) O/o the Commissioner of Central Excise No.4, Lal Bahadur Sasthri Road, C.R.Building, Bibikulam, Madurai. .. Respondents in all the petitions PRAYER Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of writ of Certiorari to call for the records of the respondent and quash the summons dated 28.09.2010 issued by the respondent in the light of the instructions issued by the Central Board of Excise & Customs in F.No.137/39/2007-CX 4 dated 26.02.2007 and pass such further or other orders as this Court may deem fit and proper in the circumstances of the case. !For Petitioner...Mr.Ramani Senior Counsel for Mr.P.Radhakrishnan ^For Respondent...R.Aravindan (Takes notice) :ORDER
Heard.
2. The petitioners were carrying on business as partners in V.V.Vanniaperumal & sons. By virtue of Section 14 of the Central Excise Act, 1944, the Superintendent of the Central Excise (STU), Headquarter, Madurai-2 had issued summons to the petitioners to appear before him. The orders of summons are under challenge before this Court in these three writ petitions.
3. Mr.Ramani, learned Senior Counsel appearing for Mr.P.Radhakrishnan impugning the summons firstly contended as the Central Board of Excise and Customs itself had given circular that personal appearance need not be insisted upon and hence it is unnecessary to appear. Secondly he submitted that there is no requirement in law to appear on summons when the petitioners themselves can depute a person who is familiar with their accounts to make clarification to the officers in respect of petitioners' business. He claimed that in the present case, the petitioners have kept the records clean and they are ready to co- operate with the officers in their enquiry and investigation. Hence the summons impugned are totally uncalled for and nothing but a harassment.
4. However this Court is unable to accept any one of the contentions advanced before this Court. Under the Central Excise Act no proceeding has been initiated and the petitioner has come before this Court even before any statutory proceedings to culminate into a concrete finding. Their only problem is that they do not want to appear before the officer for inexplicable reasons. I do not find any ground to forestall the summons unless there was a deprivation of liberty guaranteed under Article 21 of the Constitution of India.
5. An Excise officer issuing summons to appear with records cannot be said to be deprivation of liberty of an individual. This Court do not find any acceptable legal ground raised in the writ petition. It can be presumed that it was for egoistic reasons and not on any concrete legal foundation. If the petitioner is unfamiliar to explain the accounts maintained by them, it is always open to them to take along a person who is well versed with their accounts to explain to the officer his queries. But on that ground they cannot seek to dispense with their personal appearances. If the authority wants to make further clarification, they can always question the petitioners, who were responsible in running the business. This Court do not find any legal injuries were suffered by the petitioners by the receipt of the summons so as to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India.
6. In this case, the issue related to the summons issued by the Excise authorities. Even while dealing with the power of search and seizure provided under the Income Tax Act, when a challenge was made about the likelihood of the abuse of the power by the authorities, a Constitution Bench of the Supreme Court had rejected such contentions vide its judgment in Pooran Mal v. Director of Inspection (Investigation), reported in (1974) 1 SCC 345. It is necessary to extract the passages found in paras 7 to 9 which are as follows; "7.Dealing first with the challenge under Article 19(1)(f) and (g) of the Constitution it is to be noted that the impugned provisions are evidently directed against persons who are believed on good grounds to have illegally evaded the payment of tax on their income and property. Therefore, drastic measures to get at such income and property with a view to recover the government dues would stand justified in themselves. When one has to consider the reasonableness of the restrictions or curbs placed on the freedoms mentioned in Article 19(f) and (g), one cannot possible ignore how such evasions eat into the vitals of the economic life of the community. It is a well-known fact of our economic life that huge sums of unaccounted money are in circulation endangering its very fabric. In a country which has adopted high rates of taxation a major portion of the unaccounted money should normally fill the Government coffers. Instead of doing so it distorts the economy. Therefore, in the interest of the community it is only right that the fiscal authorities should have sufficient powers to prevent tax evasion.
8. Search and seizure are not a new weapon in the armoury of those whose duty it is to maintain social security in its broadest sense. The process is widely recognized in all civilized countries. Our own Criminal Law accepted its necessity and usefulness in Sections 96 to 103 and Section 165 of the Criminal Procedure Code. In M.P.Sharma v. Sathish Chandra1 the challenge to the power of issuing a search warrant under Section 96(1) as violative of Article 19(1)(f) was repelled on the ground that a power of search and seizure is in any system of jurisprudence an overriding power of the State for the protection of social security and that power is necessarily regulated by law. As pointed out in that case a search by itself is not a restriction on the right to hold and enjoy property though a seizure is a restriction on the right of possession and enjoyment of the property seized. That, however, is only temporary and for the limited purpose of investigation. Then the Court proceeds to say:(p.1081) "A search and seizure is, therefore, only a temporary interference with the right to hold the premises searched and the articles seized. Statutory regulation in this behalf is necessary and reasonable restriction cannot per se be considered to be unconstitutional. The damage, if any, caused by such temporary interference if found to be in excess of legal authority is a matter for redress in other proceedings. We are unable to see how any question of violation of Article 19(1)(f) is involved in this case in respect of the warrants in question which purport to be under the first alternative of Section 96(1) of the Criminal Procedure Code."
9. Similar powers entrusted to those whose duty it was to enforce taxation laws were upheld by this Court in CIT v. R.S.Jhaver2. In that case Section 41 of the Madras General Sales Tax Act of 1969 was under challenge. It was held by this Court that an officer empowered by the Government under sub-section (1) of Section 41 was entitled to effect a search and seize goods and articles as provided in that Section. Dealing with the question of search and seizure in a taxing statute the Court observed at p.158:
"Now it has not been and cannot be disputed that the entries in the various lists of the Seventh Schedule must be given the widest possible interpretation. It is also not in doubt that while making a law under any entry in the Schedule it is competent to the Legislature to make all such incidental and ancillary provisions as may be necessary to effectuate the law; particularly it cannot be disputed that in the case of a taxing statute it is open to the Legislature to enact provisions which would check evasion of tax. It is under this power to check evasion that provision for search and seizure is made in many taxing statutes. It must therefore be held that the Legislature has power to provide for search and seizure in connection with taxation laws in order that evasion may be checked."
It is, now too late in the day to challenge the measure of search and seizure when it is entrusted to income tax authorities with a view to prevent large scale tax evasion."
(Emphasis added)
7. Under such circumstances, the writ petitions are misconceived. Accordingly, the writ petitions stand dismissed. Consequently, connected miscellaneous petitions are closed. No costs.
jikr To The Superintendent (STU) O/o the Commissioner of Central Excise No.4, Lal Bahadur Sasthri Road, C.R.Building, Bibikulam, Madurai.