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PETITIONER: SHEONATH PRASAD & ORS.

       Vs.

RESPONDENT: STATE OF BIHAR

DATE OF JUDGMENT: 30/04/1968

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SIKRI, S.M.

CITATION:  1968 AIR 1517            1969 SCR  (1) 150

ACT: Bihar  Sales  Tax  Act  1947, s. 2(1)  and  s.  17-Power  of inspection,  search  and  seizure  under  s.  17--‘Place  of business’, definition of--Whether only premises declared  by the dealer to be place of business under Act and Rules to be treated as such. Criminal  Procedure  Code, ss. 165(4)  and  103-Exercise  of powers under s. 17 whether attracts provisions.

HEADNOTE: The   first   appellant’s  premises  were  raided   by   the Superintendent  of  Commercial Taxes  (Intelligence  Branch) exercising  the powers of Assistant Superintendent of  Sales Tax.   He found a duplicate set of accounts  being  prepared there   and  took  the  various  account  books   into   his possession.   The  appellant  along  with  others  came  and snatched away the bundle  containing the account books.  The Assistant  Sessions Judge as well as  the High  Court  found that the inspection, search and seizure had been made by the Superintendent of Commercial Taxes in purported exercise  of his,  powers under s. 17 of the Bihar Sales Tax  Act,  1947. One of the offences charged against the appellants was  that of dacoity under s. 395 I.P.C. While the Assistant  Sessions Judge  acquitted  the appellants of this  offence  the  High Court  convicted them and sentenced them to two years’  R.I. for it.  In appeal to this Court it was contended : (i) that the  power of inspection seizure and search under s. 17  can be  exercised  only in a place of business declared  by  the dealer  under  the Act and the Rules and as the  place  from where the accounts books were seized in the present case was not a place so declared, the inspection, search and  seizure were  illegal;  (ii)  that  the  search  was  made  by   the Superintendent  in  the  course of  an  investigation  of  a cognizable  offence,  and as there was  a  contravention  of s.165(4) read with s. 103 of the Criminal Procedure Code the search  and seizure were illegal; (iii) that  the  sentences should be mitigated. HELD  : (i) The dealer kept accounts of sales at  the  place from  where  they  were  recovered.   Therefore  under   the definition  in s. 2(1) of the Bihar Sales Tax Act  the  said place  was  a  place  of business,  and  could  be  lawfully searched  by the Superintendent under s. 17 read with s.  18

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of  the  Act.  The power of inspection  search  and  seizure under  s. 17 is not limited to a place of business  declared by a dealer in his application for registration or otherwise and it can be exercised in respect of any and every place of business. [154 D-G] (ii)In  the  present  case  the,  Superintendent  was   only exercising  powers under s. 17 and was not investigating  or dealing   with  any  cognizable  or  other   offence.    The provisions  of  s. 165(4) read with s. 103 of  the  Criminal Procedure  Code were therefore not attracted and he was  not required to comply with those provisions. [155 B--C]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 189  of 1965. 151 Appeal  by special leave from the judgment and  order  dated September  22,  1965 of the Patna High Court  in  Government Appeal No. 40 of 1962 with Cr.  Revision No. 122 of 1963. A.  S. R. Chari, Surendra Prasad and D. Gobardhun, for  the. appellants. R. K. Garg for D. P. Singh, for the respondent. The Judgment of the Court was delivered by Bachawat, J.-Nine persons were tried for various offences by the   3rd  Assistant  Sessions  Judge,  Patna.   The   Judge acquitted  Ramnath  and  Madan  of  all  the  charges.    He convicted  Sheonath, Matukdeo and Sarjoo under sec.  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,  Gullat   and Bishwanath  under sec. 353 read with sec. 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  sec. 147 but did not pass a  separate  sentence under  it.   He acquitted all of them of the  charge  under, sec. 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 sec. 395  and sentenced  them  to undergo rigorous  imprisonment  for  two years  each, enhanced the sentences already imposed on  them under  sec. 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  sec.  395 and  sentenced  them  to  undergo rigorous  imprisonment  for  one  year  each,  enhanced  the sentences  imposed  upon them under sec. 153/149  by  adding sentences of one years 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. 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

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rest of the party he went upstairs-.  In the eastern room he found the munims Sarjoo Prasad’ 152 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, Bill at 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 accounts 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. The  courts  below  found that the  inspection,  search  and seizure  were made by Sharma in the exercise of  his  powers under  sec. 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 sec. 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 s. 165(4) read with s. 103 of the  Criminal Procedure Code the search and seizure were illegal.  He also pleaded for the mitigation of the sentences. 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 relatto profits derived from  the               business  of  any  firm,  or  to  furnish  any               information relating to          the stocks of               goods of, or purchases,; sales and 153               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

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             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               subsection (3) the Commissioner may enter  and               search any place of business of any dealer." 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 , It provides for publication of the list registered dealers.  Section  18 authorises  the State Government to delegate the  powers  of the  Commissioners to any officer appointed under sec. 3  to assist  him.   Sec. 19 requires a registered dealer  or  any other dealer to whom a notice is served under sec. 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 a cognizable offence punishable  under sec. 26(1)(g).  Under sec. 27 the Commissioner may authorise any  person  appointed  to  assist  him  under  sec.  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 sec. 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 r. 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 circum- 10Sup.  C. I/68-11 154 stances.   Form I 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 11.  That form gives the  location  of  the place  of business, and warehouses of the dealer.   Rule  11 provide for publication of lists of registered dealers.  The lists give the location of their places of business. 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 no where  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 s. 17(2) seize them under s. 17(3) and enter and search  the  place  under  s.  17(4).   The  power  of   the Commissioner  under  sec. 17 was delegated to  Sharma  under

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sec. 18.  He could therefore lawfully exercise those powers. We  see no ground for holding that the power under  sec.  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  sec.  17.  The power under  sec.  17  can  be exercised  in relation to any dealer whether  registered  or unregistered.  An unregistered dealer is not exempt from the operation  of  s.  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  sec. 17 -is not limited to a place of  business  dec- lared  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 the place of business of the dealer the  Commissioner will be guilty of trespass. 155 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  s. 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 sec. 17 was  delegated to Sharma.  In making the inspection, search and seizure  he was  exercising  the  powers  under sec.  17.   He  was  not investigating or dealing with an offence.  The provisions of sec.  165 (4) read with sec. 103 of the  Criminal  Procedure Code were therefore not attracted and he was not required to comply with those provisions. 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. In  the  result,  the  appeal  is  allowed  in  part.    The convictions of the appellants by the courts below  including their  convictions  by  the High Court under  sec.  395  are affirmed.   The  sentences under sec. 395 and  the  enhanced sentences  in  respect  of other  offences  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. G.C.             Appeal partly allowed. 156