THE COMMISSIONER OF COMMERCIAL TAXES AND OTHERS ETC. versus R. S. JHAVER AND OTHERS ETC.

Citation: [1968] 1 S.C.R. 148 · Decided: 09-08-1967 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

148 
THE COMMISSIONER OF COMMERCIAL TAXES AND A 
OTHERS ETC. 
[K. N. 
v ... 
R. S. JHA VER AND OTHERS ETC. 
August 9, 1967 
WANCHOO C. 
J., R. S. _BACHAWAT V. RAMASWAMJ, B 
G. K. MITTER AND K. S. HEGDE, JI.] 
Madras General Sales TlllX' Act, l of 1969, •. 41-ocope of-sub-
sec. (2) granting power to 
inspect-Whether includes . power . of 
search-sub-section (4) giving power to officer confiscating to give 
dealer an option to pay too: plus an additional amount before stage 
of first sale when ~ 
ordinarily becomes due-Whether !'epugnant 
to scheme of Act and invalid-Sub-sec. (3) authorising seizure and C 
sub-6<?ction (4) authorising confiscation.-Whether unreasona~le . res-
trictions and violative of Art. 19 (1) (f) and (g) of the Constitution. 
On August 19, 1964. officers belon~g to the Department of th_e 
appellant raided and searched the premises of a company and fore1-
blv removed certain accounts and goods. 'I'he respondents challenged 
the department's action by wrU petitions filed in the High Court 
under Art. 226 of the Constitution praying that the articles seized D 
should be returned. It was contended by the petitioners that on a 
proper construction of section 41 of the Madras General Sales Tax 
Act, No. 1 of 1959, the officers of the Department had no authority 
to search the premises and seize any account books or goods found 
there; that if section 41(4) authorised seizure and confiscation of 
goods, it was beyond the legislative competence of the State Legis-
lature, for it was not covered by item 54 of Li~t II of the Seventh 
Schedule to the Constitution relating to "taxes an the sale or pur- E 
chase of goods"; and that if various provisions in s. 41 were capable 
of being construed as authorising search and seizure, they were 
violative of Art. 19(1)(f) and (g) of the Constitution. 
The High Court allowed the petitions holding, inter alia, that 
s, 41 (2) did not permit a search being made and only provided for 
inspectiion; the power of seizure or confisc.,tion in s. 41(4) was be-
yond the legisla!JWe competence of the State Legislature; and that I' 
sub-sections (2), 
(3) and (4) of s. 41 contained unreasonable res-
triction3 and were violative of Art. 19(1). (f) and (g). The High Court 
also found with respect to one of the petitions that the search war-
rant had been issued without the application of mind by the magis-
trate and was bad. On appeal to this Court; 
HELD : dismissing the appeal, 
(i) Anything recovered during the search must be returned to G 
the P:"titioners for the safeguards provided by s. 165 of the Code of 
Criminal. Procedure were not followed and in one case the finding 
of the High Cou:t that the search warrant issued by the magistrate 
was bad on vanous grounds was not challenged; furthermore any-
thing confiscated must also be returned as sub-section (4) of s 41 
must fall. fl63 B-D]. 
· 
Clause (a) of the second proviso to sub-section (4) gives power B 
to the officer ordering confiscation to give the person affected an 
option tv pay in lieu of confiscation, tin cases where the goods are 
taxable under the Act, the tax recoverable and an additional amount 
and thus provides for' recovery of tax even before tlie first sale in 
l 
COJDIISSIONER OF COMltERCIAL TAXES v. JHAVl<R (JVanc/100, 0. J,) 
149 
A the State which is the point of time in a large majority of cases for 
recovery of tax. As such it was repugnant to the entire scheme of 
the Act and sub-section (4) must therefore be struck down. As Clause 
(a) compels the officer to give the option and thus compels recovery 
of tax be.fore the first point of sale, which cannot have occurred in 
cases of goods seized from the dealer himself, it is clearly intended 
by the legislature to go together with the main part of the Sectio.n 
and is not therefore severable. [l59F-160Dl. 
B 
(ii) Although generally speaking the power to inspect does not 
give power to search, where, as in the case of s. 41 (2) the power has 
been given to inspect not merely accounts registers, records, goods, 
etc,, but also to inspect the office!l, shops etc., these two powers to-
gether ·amount to givt>ng the c-oncerned officer the power to enter and 
search the offices etc. and if he finds any accounts or goods in the 
offices, shops, etc., to ,:.nspect them. The High Court was therefore 
C wrong in holding that there was no power of search whatsoevel' 
under sub-section (2). f154H-155f:l. 
The proviso to sub-section (2) in providing that all s

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