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11. The CAG report was laid by the Government before the Legislative Assembly in August, 1999, and the Legislative Assembly referred the said CAG report in terms of Rule 235 of the Rules of Procedure and Conduct of Business in Nagaland Legislative Assembly to the Public Accounts Committee (PAC). In March, 2002, the PAC has submitted its report to the Legislative Assembly of the State and with regard to the CAG report regarding the working of the Directorate of State Lotteries, has held the said CAG report to be unsustainable on facts. The case of the petitioners in the writ petitions is that the executive including the respondents cannot assume jurisdiction and conduct investigation over a matter over which the House or its Committee is investigating. It is stated that in any event the final report of PAC is binding on the executive. It is further averred that the CAG report has become non est in view of the PAC report in March 2002, as the CAG report begins and terminates within the walls of the House and is a matter relating to internal procedure of the House. In short, the case of the petitioners is that the respondents cannot rely on the CAG report either in full or in part for the purposes of conducting search and seizure operations on the petitioners on the basis that there are some allegations in the said report in respect of the firm, M/s M.S. Associates in which one of the directors is related to the petitioners by treating the petitioners as a part of the group of M/s M.S. Associates. It is further averred that the "information" in possession of the designated authority was CAG report on the basis of which the said authority formed "reasons to believe". It is further stated that the CAG report could not be in possession of the said authority, cannot be used by it on account of the Constitutional embargo and as such the entire search and seizure operations against the petitioners are unconstitutional, illegal, non est and void ab initio. It is further stated that, if the searches are declared as illegal, then the impugned notices issued under Section 158BC both dt. 20th Feb., 2001, were liable to be quashed as they could be issued only if the search and seizure operations are held to be legal and valid.

15. The case of the respondents that a finding in the CAG report can be used against the citizen as there is no bar to such user under the Constitution. It was further submitted that a copy of the CAG report was forwarded by the CAG to the Union Finance Ministry and as such the concerned officer came into possession of the said CAG report and used the same for forming the requisite belief and as such there is no breach of privilege as the said report was obtained legally. It was further submitted that if CAG report gives indication of evasion of tax, then the same can be used by the concerned officer. It is further submitted that the word "information" should be given a wide and not restricted meaning and the executive can use all the "information" from legislative documents or proceedings in Legislative Assembly, etc. in a civil or a criminal matter and the proceedings before the Legislative Assembly would not be a bar to investigation in any matter. It is further submitted that as there are no legal or constitutional impediments to the use of the CAG report, the action of the respondents cannot be said to be unreasonable or unwarranted. It is further the case of the respondents that they had information other than CAG report and even if CAG report could not be relied upon, the other information was sufficient on the basis of which it can be said that the concerned officer rightly formed the requisite belief and issued the warrants of search and seizure under Section 132 of the Act. Thus, the contention of the respondents is that the information can be segregated i.e., CAG report and "other information" and the warrants of authorisation under Section 132 cannot be found fault with if it is based on "other information" even if it were to be held that CAG report cannot be said to be information in possession of the concerned officer.

"(a) No member or officer of the House should give evidence in a Court of law in respect of any proceedings of the House or any Committee of the House or any document connected with the proceedings of the House or in the custody of the Secretary of the House without the leave of the House being first taken."

As such, even if the Courts require any evidence, then it should take leave of the House. In the present case, no leave of the House was taken by the concerned officer as there was no occasion to do so as the CAG report was taken cognizance of much prior to the same being placed before the House. Could the concerned officer take into account the CAG report while the same was being deliberated upon by the Assembly or its Committee. The answer to this question has to be an emphatic "no". If the concerned officer could not have dealt with the said CAG report when it was debated before the House or its Committee, can the concerned officer use the said report prior to it being laid before the House. The answer to this question has to be also in the negative. It is well-settled that what cannot be done directly cannot be permitted to be done indirectly. In any event, the concerned officer cannot conduct parallel inquiry into the CAG report once the Legislative Assembly under the Rules is to debate the said report and is to take action thereon. It is pertinent to mention that under the Constitution that PAC examines cases involving losses, nugatory expenditure and financial irregularities. The CAG is an important adjunct of the Committee. The PAC calls officials to give evidence in connection with the examination of accounts relating to a particular ministry. When the PAC is examining official witnesses, the CAG (in the case of the State, the Accountant General) sits to the right of the Chairman and assists him as to the evidence being taken and with the permission of the Chairman, the CAG may ask a witness to clarify a point and he may further make a statement on the facts of the case. The CAG or any of his senior officers is also present at the other sittings of the PAC and clarifies to the members important points arising out of the accounts to be examined by them. After the examination of the audit reports is completed and all relevant information obtained from the Government, the draft report is prepared by the Secretariat based on evidence, oral and written, given before the Committee by the Departmental Representatives. The draft report is then submitted to the Chairman for approval and a copy thereof is forwarded to the CAG for factual verification. When the PAC sits to consider the draft reports as approved by the Chairman, the CAG (in the case of the State, the Accountant General) is also present at the sitting to point out changes in the facts and figures where necessary. The report of the Committee contains a summary of main conclusions and recommendations. The report is placed before the House and is discussed on the floor of the House. As such, the respondent-authorities would have no authority or jurisdiction to form belief on the basis of the said CAG report as in doing so they would be substituting their wisdom with that of the House or its Committee (PAC) and/or, to conduct parallel investigations inasmuch if the respondents conduct any investigation either in respect of the Government or form a belief in respect of a stranger on the basis of the said CAG report, it would be a matter without jurisdiction as it would tantamount to conducting investigation over a matter over which the House or its Committee which has exclusive jurisdiction is investigating.

55. The question is not of the privilege of the Legislative Assembly or its members and how the privilege is to be invoked but the manner in which the property of the House has to be dealt under the rules and procedures, practice and convention of the Legislative Assembly. If the Government officials use documents, etc. which have to be submitted to the House then it would lead to a conflict and undermine the supremacy of the House to deal with its own property. This could not be the intent of the founding fathers to let the officials and executive to play foul with the Parliament/Assembly and do what they could not otherwise do. Such interpretation would further be contrary to the well-settled principle that the Parliament/Assembly is supreme and thus its property and/or functioning cannot be subjected to the Government officials, etc. either directly or indirectly. The report of the GAG is meant for the House to be dealt with by the House or its Committee, as CAG was constituted for that purpose only by the Constitution. The CAG reports under the Constitution are to be laid before the Legislative Assembly as it deals with the working of the State or its Department. Merely because the CAG report contains certain remarks against citizens, can such remarks constitute "information" and can such remarks become the basis for further investigation. In short, can the executive conduct parallel investigation in a matter exclusively reserved in the Assembly and/or its Committee. Let us consider that a finding in CAG report about evasion of tax is treated as a piece of information by the Department to proceed against a citizen. The PAC who is only constitutionally empowered to judge the report later finds that the finding against the citizen about evasion of tax is totally wrong and unsustainable. Can the Department of Income-tax still find and hold to the contrary stating on the basis of CAG report that the citizen did evade tax and is proceeded against thereby leaving the citizen without any remedy if the limitation, etc. had expired to reopen or review the orders, etc. The answer would be emphatic "no" as such parallel investigations and findings would lead to a conflict between the two reports i.e., one by PAC and another by the executive in respect of the citizen. Can it be said that the report or finding of the Department would gain supremacy. Saying this would undermine the supremacy of the Parliament/Legislative Assembly and this result ought to be avoided. If the contention of the respondents were to be accepted then, although in the illustration, the PAC report would assume supremacy but still the Department's report recording contrary finding would co-exist. Such situations could have been avoided, if initially the Department were not permitted to use the CAG report for any collateral purpose. This is what led to the Division Bench of the High Court of Delhi in B.L. Wadhera case (supra) to hold that CAG reports are within the special and exclusive jurisdiction of the Assembly and the Courts cannot issue directions on that basis. In the present case also, a similar situation has arisen. The CAG had made certain allegations against the working of the Directorate of Lotteries of the State of Nagaland and while doing so made certain remarks against M/s M.S. Associates. The said CAG report, as stated above, was somehow procured by the Department of income-tax. Based on that information and some other information, warrants of authorisation were issued in June, 1999, and search and seizure operations were carried out against M/s M.S. Associates and various persons/companies, etc. associated with them. However, the PAC after detailed scrutiny and examination of the CAG report held in its report in March, 2002, that the CAG report is unsustainable. Now based on the initial report, the Department took action -- can such action ought not to be reversed, if the PAC findings are reversed. If the Department can use the findings of the CAG report, unlike other discussions, etc., with immunity, the same would lead to conflict and empower the Department to scrutinize the CAG report for a collateral purpose. Such conflicting situations ought to be avoided particularly when the executive is not empowered under the Constitutional scheme to review the CAG report and as a corollary to use it for any purpose.