Gauhati High Court
WP(C)/3383/2005 on 6 May, 2022
Author: S. Saikia
Bench: Chief Justice, Soumitra Saikia
1
GAHC010002132005
THE GAUHATI HIGH COURT AT GUWAHATI
(The High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
(PRINCIPAL SEAT AT GUWAHATI)
WP(C) 3383/2005
1. M/s Om Carrying Corporation,
M.S. Road, Fancy Bazar, Guwahati - 781001,
Assam.
2. Shri Bal Kishan Sharma,
Son of Late Brij Mohan Sharma,
Manager, Om Carrying Corporation,
M.S. Road, Fancy Bazar, Guwahati - 781001,
Assam.
- Petitioner
- Versus -
1. The State of Assam,
Represented by the Chief Secretary to the
Government of Assam, Sachivalaya,
Dispur, Guwahati-781006, Assam.
2. The Commissioner & Secretary,
Government of Assam,
Finance (Taxation) Department, Sachivalaya,
Dispur, Guwahati-781006.
3. The Commissioner of Taxes, Assam,
Kar Bhawan, Dispur, Guwahati-781006.
4. The Deputy Commissioner of Taxes,
Guwahati, Zone-C, Kar Bhawan,
Dispur, Guwahati-781006.
5. The Superintendent of Taxes,
Vigilance Group, Kar Bhawan,
Dispur, Guwahati-781006.
2
6. The Certificate Officer (Taxation), Kamrup and the
Superintendent of Taxes (Recovery), Kar Bhawan,
Dispur, Guwahati-781006.
- Respondents
Advocate for the petitioners : Mr. S. K. Muktar, Advocate. Advocate for the respondents : Mr. B. Choudhury, Advocate.
BEFORE
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
Date of hearing : 30.03.2022.
Date of judgment : 06.05.2022
JUDGMENT AND ORDER
(CAV)
(S. Saikia, J)
Heard Mr. S. K. Muktar, learned counsel for the petitioners. Also heard Mr. B. Choudhury, learned counsel appearing for the respondents.
2. The petitioner No. 1 is a partnership firm carrying on the business of transportation in the States of Bihar, Bengal and Assam and the petitioner No. 2 is the manager of the petitioner No. 1. The petitioner No. 1 is registered as a 'transporter' under section 46A of the Assam General Sales Tax Act, 1993 (hereinafter referred to as "Act of 1993") and it also possesses a certificate of registration issued by the jurisdictional officer under the Act of 1993, read with Assam General Sales Tax Rules, 1993 (hereinafter referred to as "Rules of 1993"). The petitioners have been regularly submitting statements/monthly tax returns in respect of the 3 goods transported into as well as transported out of Assam. The head office of the petitioner firm is located in Kolkata in the State of West Bengal and it has its branch offices in Guwahati and in other districts of Assam.
3. On 28.01.2004, the respondent no. 5 visited the branch office of the petitioner firm in Guwahati, at Dispur, and identified himself as the Superintendent of Taxes, Vigilance Group, and served notice upon the petitioner firm under section 46(2)(a) of the Act of 1993 directing the petitioners to produce all the records and documents relating to transport and delivery of various consignments of goods made during the period from October, 2003 up to date. Thereafter, a search was conducted at the branch office of the petitioners and the respondent no. 5, in exercise of power under section 44(3) of the Act of 1993, seized some records/documents including books of accounts. Seizure list was prepared and a copy of the same was also served upon the petitioner No. 2.
4. Thereafter, the respondent no. 5 issued a notice dated 29.01.2004 to the petitioner No. 1 under section 44(1) of the Act of 1993 requiring the petitioner to appear before him 03.02.2004 in the office of the respondent no. 5 and to produce some more documents. On 17.02.2004, a Show Cause notice was issued by the respondent no. 5 requiring the petitioner No. 1 to show cause as to why penalty under section 46A(4) of the Act of 1993 should not be imposed upon the petitioner company and why the penalty and taxes should not be realized. The petitioner company submitted its reply to the Show Cause notice on 22.02.2004 denying the charge in the Show Cause notice. Thereafter, another notice dated 27.02.2004 was issued by the respondent no. 5 asking the petitioner to appear before him on 03.03.2004 and to produce 4 documentary evidence. On 02.03.2004 the petitioner company submitted its reply to the said notice requesting the respondent authority not to realize tax and/or to impose penalty. The respondent no. 5 thereafter worked out an amount of Rs. 2,75,000/- as tax payable by the petitioner and verbally directed the petitioner to deposit the same, which the petitioner deposited vide Treasury Challan dated 30.03.2004.
5. About four months thereafter the petitioner No. 1 was served with an Assessment order-cum-Notice of Demand dated 05.08.2004, issued by the respondent no. 5 under section 46A(4), whereby tax was assessed at Rs. 5,68,942/- (Rupees five lakh sixty-eight thousand nine hundred and forty-two) and also penalty was imposed to the tune of Rs. 17,06,826/- (Rupees seventeen lakh six thousand eight hundred and twenty-six). Since the aforesaid amount could not be paid by the petitioner No. 1 immediately, another notice dated 21.09.2004 was issued by the respondent no. 4 directing the petitioner company to deposit the amount within a period of seven days from the date of receipt of the notice. It was also mentioned in the said notice that failing to deposit the amount within the period stipulated therein, recovery proceedings under Bengal Public Payment Recovery Act, 1913 (hereinafter referred to as "Recovery Act of 1913") will be initiated against the petitioner and, besides levy of taxes and penalty, proceedings will be initiated in the court against the petitioner under section 61 of the Act of 1993. The petitioner no. 2, i.e., Manager of the Guwahati branch office of the petitioner No. 1 suffered from some illness and was out of station, which fact was duly intimated to the respondent no. 5 requesting him to keep the matter pending till the respondent no. 2 returns and resumes his duty. Thereafter, upon the petitioner no. 2 resuming his duty, the entire papers and documents 5 regarding the issue were sent to the Administrative Head Office of the petitioner company seeking advice on the further course of action.
6. Being situated thus, the petitioner was served with another notice dated 25.10.2004, issued by the respondent No. 6, i.e. Certificate Officer, Kamrup, Guwahati, under section 7 of the Bengal Public Demand Recovery Act, 1913, whereby the petitioner No. 1 was directed to pay Rs. 20,00,768/- (Rupees twenty lakh seven hundred and sixty-eight) with regard to Case No. 249/2004-05/AGST. Vide the aforesaid notice, it was also intimated that the petitioner was permitted to file objections, if any, within a period of one month from the date of receipt of the said notice.
The petitioner submitted a petition dated 07.12.2004 before the respondent no. 5 requesting for cancellation of the said notice. A copy of the said petition was also filed before respondent no. 6 praying for keeping the recovery proceeding in abeyance. The respondent no. 6, thereafter, treating the petition dated 07.12.2004 filed by the petitioner as objection in respect of the recovery proceedings issued a notice under section 10 of the Recovery Act of 1913 requiring the petitioner to appear before the respondent No. 6 with all relevant documents. A written statement was filed by the petitioner No. 1 on 23.12.2004 before the respondent no. 6 denying the liability of taxes and penalty imposed upon it. However, no order was passed thereafter by the respondent authority.
7. The petitioners thereafter approached this court by filing the writ petition wherein the petitioners have questioned the jurisdiction of the respondent no. 5 to issue the impugned notice, the assessment proceedings as well as the recovery of taxes and imposition of penalty. Referring to section 45 of the Act of 1993, the petitioners have also questioned the jurisdiction of the respondent no. 5 to function as a 6 Vigilance Officer inasmuch as such Vigilance Committee/Vigilance Group has to be constituted by the government by issuing appropriate notification. According to the petitioners, the respondent no. 5 cannot be identified as a taxing authority under Rule 7 of the Rules of 1993 framed under section 3(1) of the Act of 1993. Therefore, he has no locus to act as a taxing authority under the Act and the Rules of 1993. Consequently, the notices issued, the proceeding initiated and the assessment orders passed as well as the subsequent demand notices issued for recovery of taxes and imposition of penalty are but without jurisdiction and, therefore, the same are not in compliance of the provisions of the Act of 1993 read with the Rules of 1993. The petitioners therefore pray for setting aside and quashing of the notice dated 28.01.2004 (Annexure-B), Seizure List dated 28.01.2004 (Annexure-C), Notice dated 29.01.2004 (Annexure-D), Show Cause notice dated 17.02.2004 (Annexure-E), Notice dated 27.02.2004 (Annexure-G), order of imposition of penalty and levy of taxes dated 04.08.2004 (Annexure-P), Assessment Order-cum-Notice of Demand dated 05.08.2004 (Annexure-J), Notice dated 25.10.2004 (Annexure-L) issued by the Certificate Officer (Taxation), Kamrup, Guwahati, and the Notification dated 14.03.2005 (Annexure-S) issued by the Commissioner of Taxes, Assam. It was further prayed that the Case No. 249/2004-05/AGST and also the Notification No. CTS.45/95/PT/ 2004/2 be also set aside and quashed.
8. The respondents duly contested the matter by filing their affidavit through the Joint Commissioner of Taxes. The respondent department contended that the petitioner No. 1 had failed in filing regular monthly returns/statements as required to be filed in respect of the consignment of taxable goods transported by it. The department had detected that the 7 petitioner No. 1 had actively abetted evasion of tax by the concerned consignee/dealers of taxable goods. The respondent department defended the assessment of tax, issuance of the notices and imposition of tax and penalty and contended that the petitioner appeared before the concerned authority but it could not substantiate its claim of proper accounting with regard to the consignments of taxable goods transported by it. The respondent further contended that Central Vigilance Group was constituted by the Commissioner of Tax vide order dated CTMS- 2/200/Pt/40 dated 21.01.2002. In terms of the said order, the Central Vigilance Group was required to work under his control for the purpose of detection of evasion of taxes and realization of recoverable taxes/penalty thereof. The said Vigilance Group underwent reconstruction vide order dated 04.07.2002. The respondents disputed the contention of the petitioners that the respondent no. 5 did not have jurisdiction. It was contended that the question of jurisdiction was never raised during the hearing conducted by the department. That apart, under section 4 of the Act of 1993 it is provided that no person was entitled to call in question the jurisdiction of any authority appointed under section 3 after expiry of 90 days from the date of receipt of any notice under the Act.
9. We have heard the learned counsels for the parties and have also perused the pleadings on record.
10. At the outset it is noticed that the Act of 1993 has elaborate provisions for appeals to the appellate authority as well as the tribunal in terms of section 33 and 34 respectively of the Act of 1993. Under section 35 of the said Act, it is only a revision which can be preferred before the High Court against any order passed under section 34(3) by the Tribunal/the Assam Board of Revenue. However, the issues raised by the 8 writ petitioners in the present proceeding relate to jurisdiction of the respondent officers of the department, more particularly, respondent no. 5 to function as an officer of the Vigilance Group and to conduct search and seizure as also the power of assessment and consequential orders for demand and recovery of tax and penalty.
11. The petitioners have also questioned the search and seizure made by the respondent no. 6 in the place of its business. According to the petitioners, the search was conducted by an officer of the department, namely, respondent no. 5, projecting himself to be a member of the "vigilance wing". According to petitioner such projection is a misrepresentation by the respondent no. 5 inasmuch as the said vigilance wing was not constituted on the date when the search and seizure was made. The petitioners contend that the constitution of the vigilance wing was required to be done in terms of section 45 of the Act of 1993. This constitution was to be made by publication of necessary notification by the State Government. According to the petitioners no such notification was published by the State Government informing constitution of any vigilance wing and, therefore, the search conducted by the respondent no. 5 by projecting himself to be a member of the vigilance wing is nothing but misrepresentation by an officer of the State and, therefore, without any jurisdiction. The search conducted, therefore, is bad in law and the consequential assessments being made are also contrary to law and the same are also liable to be interfered with, set aside and quashed.
12. The respondents, on the other hand, dispute the contention of the petitioners and rely on the affidavit filed by them to contend that the "Central Vigilance Group" was constituted by the Commissioner of Taxes vide his order No. CTMS-2/200/Pt/40 dated 21.02.2002. This group, 9 however, underwent slight reconstitution vide another order dated 04.07.2003. It is contended that the assessing authority had proceeded against the petitioner-transporter only on 28.01.2004 when the documents were seized and Show Cause notices were issued accordingly. The respondents also contend that on the date when the seizure was made and also in the subsequent proceedings, the question of jurisdiction was never raised by the petitioner. Therefore, in view of the fact that the Central Vigilance Group was constituted as per the provisions of law and prior to the seizure made, the question of the seizure being illegal for want of jurisdiction is strongly disputed.
13. Under the provisions of the Act there is no definition for "transporter". However, the definition prescribed for "dealer" under section 2(10) of the Act of 1993 includes a person delivering goods on higher purchase or any system of payment by installment or making any sale within the meaning of clause 33 of the section, besides any person who carries the business of selling or purchasing goods in the State, any government or local authority; any cooperative society or a club or any association which supplies or sells goods to its members; any factor, broker, commission agent, del credere agent; any auctioneer or any other mercantile agent, by whatever name called.
Section 2(33) defines "sale" to define any transfer of property in goods by any person for cash or for deferred payment or other valuable considerations including, inter alia, delivery of goods on higher purchase or any system of payment or installment or under a financial lease. It is provided that such delivery or transfer or supply of goods shall be deemed to be sale of goods by the person making the delivery, transfer or supply.
10Section 44 prescribes the procedure for production, inspection, seizure of accounts, documents as well as search for premises. Under sub-section (3) of section 44 it is provided that any authority appointed under sub-section (1) of section 3 having reasons to suspect evasion of payment of tax by a dealer including a person transporting the goods or any owner of warehouse or godown and is keeping or has kept the books of accounts in such a manner as is likely to cause evasion of tax payable under this Act, such authority may, for reasons to be recorded in writing, seize such books of accounts, registers or documents of the dealers including the persons transporting the goods and/or the owner of warehouse/godown. Such books of accounts, documents etc. seized may be retained for so long as reasonably necessary for examination thereof and for prosecution for any offence punishable under the Act and thereafter shall be returned to the person concerned in the prescribed manner. However, if the seized documents, books of accounts, registers etc. are to be retained by the authority other than the Commissioner for more than 120 days, then the reasons for doing so shall be recorded in writing and the approval of the Commissioner shall be obtained by the authority for retaining such documents, books of accounts, registers, etc. Section 46A, which was inserted w.e.f. 10.05.2002, prescribes for obtaining certificate of registration in respect of every transporter, carrier or transporting agents who are carrying on their business relating to transportation of taxable goods in Assam. Relevant portion of sections 2(10), 2(33), 3(1), 44(3), 46A, are extracted below:
"2. (10) 'Dealer' means any person who carries on the business of selling or purchasing goods in the State and includes -
(i) Government and local authority;11
(ii) a cooperative society or a club or any association which supplies goods to its members or which sells goods supplied to it by its members;
(iii) a factor, a broker, a commission agent, a del credere agent, and auctioneer or any other mercantile agent, by whatever name called, and whether of the same description as herein before mentioned or not, who carries on the business of purchasing or selling goods and who has, in the customary business, authority to purchase or sell goods for and on behalf of, or belonging to principals whether resident within or outside the State; and includes a person delivering goods on hire purchase or any system of payment by installment or making any sale within the meaning of clause (33) of this section;
(iv) a contractor or a lessor;
2(33) 'Sale' with all the grammatical variations and cognate expressions means any transfer of property in goods by any persons for cash, deferred payment or other valuable consideration, and includes-
(i) Any transfer otherwise than in pursuance of a contract of property in any goods for cash, deferred payment or other valuable consideration;
(ii) Any transfer of property in goods (whether as goods or in some other form) involved in the execution of a works- contract;
(iii) Any delivery of goods on hire purchase or any system of payment by installments or under a financial lease;
(iv) Any transfer of the use of any goods under an operating lease;
(v) Any supply of goods by an unincorporated association or a body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(vi) Any supply, by way of or as part of any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration;12
3. Tax Authority. - (1) For carrying out the purposes of this Act, the State Government may by notification appoint a person to be the Commissioner of Taxes, together with such other persons to assist him as it thinks fit and may specify the areas or areas over which they shall exercise jurisdiction.
44.(3) If any authority appointed under sub-section (1) of section 3 has reason to suspect that any dealer is to evade the payment of any tax or any clearing or forwarding agent or a person transporting goods or any owner of a warehouse or a godown is keeping or has kept his account in such a manner as is likely to cause evasion of tax payable under this Act, such authority may for reasons to be recorded in writing, seize such accounts, registers or documents of the dealer or the clearing or forwarding agent or the person transporting goods or the owner of a warehouse or godown as may be necessary and shall grant a receipt for the same, such seized accounts, registers or documents shall be retained for so long as may be reasonably necessary for examination thereof or for a prosecution under section 57 and shall thereafter be returned to the person concerned in the prescribed manner;
Provided that if the seized accounts, registers or documents are retained by any authority other than the Commissioner for more than one hundred and twenty days, the reasons for so doing shall be recorded in writing and the approval of the Commissioner shall be obtained by the authority so retaining them.
46A. (1) For carrying out the purposes of section 46 every transporter, carrier or transporting agent, operating its transport business relating to taxable goods in Assam, shall be required to obtain a Certificate of Registration in the prescribed manner from the Commissioner or any officer appointed under section 3 to assist him, on payment of such fees as may be prescribed.
(2) Every transporter, carrier or transporting agent shall transport and deliver the goods as per provisions of 13 the Act and the rules framed thereunder and shall furnish to the Assessing Officer such particulars or information as may be prescribed.
(3) Where any transporter, carrier or transporting agent violates any of the provisions of sub-section (1) or sub-section (2), the Commissioner may after giving him a reasonable opportunity of being heard, direct him to pay by way of penalty-
(a) in case of violation of the provision of sub-
section (1) an amount not exceeding five thousand rupees for the first offence and if the offence is a continuing one with a fine not exceeding five hundred rupees for everyday during which the offence continues;
(b) in case of violation of the provision of sub-
section (2), an amount not exceeding one thousand rupees for the first offence and if the offence is continuing one with a fine not exceeding one hundred rupees for everyday during which the offence continues:
Provided that when penalty is imposed under this sub- section no prosecution for the same offence shall be initiated.
(4) When the transporter, carrier or transporting agent does anything directly or indirectly which results in evasion of tax or would have resulted in evasion of tax if such evasion was not detected and prevented in time, the Commissioner may after giving him a reasonable opportunity of being heard, direct him to pay by way of penalty an amount equal to three times the amount of tax evaded or sought to be evaded. In such case, the transporter, carrier or transporting agent shall be deemed to be a dealer and he shall also be liable to pay the tax evaded or sought to be evaded:
Provided that when penalty is imposed under this sub- section no prosecution for the same offence shall be initiated."
14. A perusal of the sections of the Act of 1993 reveals that ordinarily transporters are not required to pay sales tax as they are not treated to be dealers per se. However, in order to prevent evasion of tax, the State 14 Government has introduced the provision subsequently for registration of transporters, including transporters who transport taxable goods in the State of Assam. The rationale behind the prescription for registration of transporters is to check or prevent evasion of tax where there may be instances of sale or purchase of goods by the transporters themselves on behalf of their principal agents.
15. In the present proceedings, the departmental authority, upon information received, proceeded to examine the books of accounts and registers maintained by the petitioner No. 1, who is a transporter. This search was admittedly made in the place of business of the petitioners.
Pursuant to the seizure of books of accounts and registers, notices were issued to the petitioner No. 1 to appear before the Assessing Officer and to explain the books of accounts and/or the registers seized. Subsequently, on the basis of the materials available before the assessing authority, an assessment of tax was made and penalty was imposed on the petitioner, a portion of which the petitioner claims to have already paid. In order to recover the outstanding taxes and penalty due from the petitioner, recovery proceeding had been initiated which, however, was stayed by orders of this court passed in the present proceedings.
16. The petitioners have not challenged the vires of any of the provisions of the Act. That apart, there are statutory provisions for appeal which are not being availed of by the petitioners to ventilate their grievances against the proceedings initiated by the respondent authority. On the contrary, the petitioners have questioned the very jurisdiction of the officers of the department conducting the search. Section 3 of the Act of 1993 prescribes "taxing authorities". Under sub-section (1) of section 3 it has been stated that the State Government may, by notification appoint 15 a person to be Commissioner of Taxes together with such other persons to assist him as he thinks fit and specify area or areas over which they shall exercise jurisdiction. Under section 44 it is clearly provided that any authority appointed under sub-section (1) of section 3, besides requiring any dealer to produce books of accounts, registers or documents or information relating to any transaction, is authorized, for reasons to be recorded in writing, to seize such books of accounts, registers or documents of any dealer including persons transporting goods or any owner of warehouse/godown. Therefore, it is clear that under the provisions of the Act, an authority prescribed under section 3(1) will be an authority who is empowered to proceed for search and seizure of any records, registers, books of accounts relating to any transaction. In the present case, respondent no. 5 is a Superintendent of Taxes and is one of the officers of the State who is vested with the powers for search and seizure under section 44, by virtue of the powers vested on him under section 3 of the Act. It is not the case of the petitioners that it is only an officer under the enforcement group/wing who is competent to conduct search. Rather, it is petitioners' case that the respondent no. 5 misrepresented himself to be a member of the vigilance group or wing and conducted search on the date on which the respondent no. 5 had not been made a member of such group or wing. There is no averment that notwithstanding the respondent no. 5 not being a member of the vigilance group or wing, he is otherwise not vested with the powers under the Act to conduct search and seizure as has been done in the present case and, therefore, such search and seizure is illegal and unauthorized. The respondent department in its affidavit has contested the case and has disputed the contentions of the petitioners by 16 contending that the Commissioner of Taxes had constituted the Central Vigilance Group vide Office Order No. CTMS-2/200/Pt/40 dated 21.01.2002 for the purpose of taking cases of tax evasion and for realization of recoverable tax and penalty thereof. This vigilance group underwent reconstitution on 04.07.2003. Although the department has made this averment in the affidavit, no notification to that effect is enclosed to the counter affidavit filed, or is available in the case records.
17. Be that as it may, in view of the mandate of section 3 of the Act of 1993, even if the petitioners' contentions are to be accepted that the impugned search was conducted by the respondent no. 5 without actually being a member of the vigilance group or wing on the date when the search was conducted, the respondent no. 5 is admittedly a Superintendent of Taxes and, therefore, an officer authorized to assist the Commissioner of Taxes for carrying out the provisions of the Act as prescribed under section 3 of the Act of 1993. Section 44 of the Act permits search at business premises and seizure of books of accounts, documents, registers etc. The power of conducting such search and seizure are made available to any authority appointed under sub-section (1) of section 3. The provision under section 44(3) specifically relates to seizure of documents, books of accounts, registers etc. and such power to conduct seizure, for reasons to be recorded, is also vested on any authority appointed under section 3(1) of the Act of 1993. Under the circumstances, in the absence of any challenge made by the petitioner regarding the powers under section 3 not being available to respondent no. 5, the mere fact that the respondent no. 5 may not have been a member of vigilance wing/group on the date when the search was conducted will not prevent an officer appointed under section 3 of the Act 17 to conduct such search and seizures for reasons to be recorded. There is no bar under the Act that officers in the rank of respondent no. 5 and below are not the competent officers to carry out any search or seizure prescribed under section 44 of the Act of 1993. No such averment is made by the petitioners as well.
18. A mere reference by the respondent no. 5 in the notice issued that he is a member of vigilance group will not make a search or seizure illegal if the officer concerned is otherwise empowered to conduct such search or seizure as provided for under the Act. The notices issued by the respondent no. 5 for production of records and documents, the inspection conducted at the business premises of the petitioner No. 1 as well as the seizure of records and documents, as mentioned in the search report dated 21.08.2004, reflect reasons for conducting the search and seizure of books of accounts, records, documents etc. of the petitioner. The reasons reflected in the Search and Seizure Memo. are extracted below:
"The transporter booked, made movement and allowed delivery of various consignments of taxable goods in fictitious names and addresses. The movement of such consignments of taxable goods are not supported by delivery notes in form-
24. The transporter allowed delivery of consignments of taxable goods without obtaining countersigned copies of the consignment notes. The entire episode is considered to have been formatted and conceived in wooing and inducing other traders to evade payment of due taxes and also to derive wrongful gain and to cause wrongful loss to the state exchequer."18
19. Even if it is to be accepted that a search conducted is illegal or without any authorization, the materials which are recovered in such search can be legally used for evaluation of taxes and for passing consequential orders, if permitted under the provisions of law. In the facts of the present case, even if it is assumed that the search conducted by respondent no. 5 was unauthorized, then that by itself will not make the materials, on the basis of which assessments have been made and recovery proceedings have been initiated, inadmissible, or the assessments made and/or the recovery proceedings illegal or arbitrary or contrary to the provisions of law. It is well settled that the materials which are recovered pursuant to a search, can be safely relied upon by the authorities to render its findings for imposition of tax etc., if otherwise permitted as per the provisions of law. In Pooran Mal etc. vs Director of Inspection (Investigation) of Income-Tax Mayur, reported in (1974) 1 SCC 345, the Apex Court held that even if some relevant material or evidence is seized or is available to the department pursuant to the search which was supposedly conducted illegally or in contravention of the provisions of the Act, then such relevant material was liable to be used and cannot be directed to be excluded from the evidence collected for the purposes of proceeding under the relevant Act.
20. Therefore, in the present case, even if this court comes to a finding that the search and/or seizure made against the petitioners is not as per the provisions of law, then the evidence collected and the materials recovered against the petitioners can be used by the department, if otherwise found admissible, in the proceedings provided for under the Act of 1993.
1921. There are statutory provisions available to the petitioners for taking recourse to for statutory remedies in respect of any assessments made pursuant to the search and seizure. Such remedial measures have, however, not been taken recourse to by the petitioners. The sole ground of the challenge made to the entire proceedings is the lack of jurisdiction of the respondent no. 5 in conducting the search and seizure operation.
22. In this proceeding, a reference was made to the judgment passed by this court in WP(C) No. 7807/2004 (Sri Sailen Konwar Dutta vs. The State of Assam and Ors.) and other connected writ petitions whereby section 4 of the Act of 1993 was held to be unconstitutional as it takes away the powers of the High Court as conferred under Articles 226 and 227 of the Constitution of India. It was submitted at the Bar that matter is presently pending disposal before the Apex Court.
23. Section 4, as it stood prior to the interference by this court, provides that "jurisdiction of the tax authority was not to be called into question". Under the provision of section 4, as it then stood, no person was entitled to call into question the jurisdiction of any authority under section 3 after expiry of 90 days from the date of receipt by him any notice under this Act from such authority. There is no bar for this court to deal with this matter as the vires of section 4 or any question relating to vires of section 4 is not an issue in the present proceeding, section 4 of the Act of 1993 having been set aside by a Co-ordinate Bench of this Court.
24. As discussed above, respondent no. 5 is a competent officer as prescribed under section 3 of the Act and no challenge to the authority or power of the officers empowered under section 3 of the Act have been made by the petitioner. The only ground of the challenge is that the 20 respondent no. 5 was not a member of the vigilance group or wing on the date when the search and seizure was made. Since we have already held that unless a challenge is made that the search was conducted by an officer not empowered under section 3 of the Act, we are not required to address the said question as it is not before us. That apart, the materials recovered during a search, which may not have been conducted as per the provisions of law, are also admissible in evidence and it is permissible to take consequential actions under the provisions of law, as have been done in the present case.
25. In view of the discussions above, we do not find any merit in the present writ petition and the same is, therefore, dismissed. Cost easy.
JUDGE CHIEF JUSTICE Comparing Assistant