Kerala H.C : the retention of documents seized as per exhibit P-1 is illegal and also (b) that the steps for prosecution initiated against the petitioner are illegal.

Common questions arise for consideration in these original petitions and, therefore, they are disposed of by common judgment.

2. The Intelligence Officer, Agrl. IT and ST, Squad No.11, Kollam, the third respondent, inspected the business premises of the petitioners on August 19, 1989, and seized the documents made mention of in exhibit P-1. When the authority concerned refused to return the said documents despite repeated requests made by the petitioners, the petitioners have filed these original petitions seeking the following reliefs :- (i) Call for records leading to exhibit P-7 and quash exhibits P- 3, P-6 and P-7 by a writ of certiorari or any other appropriate writ, direction or order.

(ii) Declare (a) that the retention of documents seized as per exhibit P-1 is illegal and also (b) that the steps for prosecution initiated against the petitioner are illegal. (iii) Stay all further proceedings pursuant to exhibit P-7 until the disposal of this original petition. (iv) Award costs of the petitioner. (v) Any other reliefs which this Court deems fit. Certain facts are not in dispute and they are : The documents were seized on August 19, 1989. On September 23, 1989, the Officer concerned directed the petitioners to produce the books of account. Thereafter, on October 18, 1989, the Officer issued a prosecution notice (vide exhibit P3). The prosecution notice was issued after the expiry of thirty days from the date of the seizure of the documents. The Officer concerned has decided to retain the documents for the purpose of prosecution.

Learned counsel for the petitioners submitting that, in as much as no decision to prosecute the petitioners was taken within thirty days from the date of the seizure, the decision of the Officer to retain the documents stating that they are required for the purpose of prosecution, is not sustainable in law. If that be so, it is further argued, they are bound to return the documents to the petitioners. In support of this argument he relied on the decision of this Court in M. C. Jacob vs. Intelligence Officer, Agri. IT and ST (1976) 37 STC 14, 16 (1975) KLT 626. Construing s. 28(3) (a) of the Kerala General Sales Tax Act, 1963, as it stood then (the present corresponding provision is sub-s. (6) of s. 28), the Division Bench held as follows : “Sec. 28(3) lays down the period of 30 days as the period within which the documents, accounts and registers seized by the officer have to be returned subject to the exception which enables retention beyond that period. That exception would operate in case these are required for prosecution. The words ‘required for a prosecution’ would necessarily involve the concept of a decision being reached within thirty days that these are required for the purpose of a prosecution to be lodged. But we cannot see the further requirement that the prosecution itself must be commenced within a period of thirty days from the date of seizure. The accounts, registers and documents would be said to be required for prosecution even in respect of a prosecution proposed to be lodged provided the decision to prosecute had been reached, for, when once an Officer decides that there should be prosecution he could also decide whether the books and documents would be required for the purpose of such prosecution. The prosecution must be lodged within a reasonable time thereafter as otherwise it will be an abuse of power vested in the Officer. It is no doubt true that the consequences of seizure of books and documents are grave. That by itself cannot alter the plain meaning of the section.”

The learned Government Pleader, however, argues that sub-s. (6) of s. 28 is differently worded and, therefore, the above ruling has little application here. Under sub-s. (6) it is enough if the Officer takes decision to prosecute within sixty days from the seizure of the documents and on such decision being taken, the Officer is entitled to retain the documents.

The question thus arising for consideration is whether the Officer shall take the decision to prosecute under the Act within thirty days from the date of the seizure of the documents as contended for by the petitioners or within sixty days from the date of the seizure of the documents as contended for by the Department. The answer depends upon the construction of sub-s. (6) of s. 28 of the Kerala General Sales Tax Act, 1963. I shall now read the sub- section “(6) The accounts, registers, records or other documents seized under sub-s. (5) shall not be retained by the Officer seizing them beyond a period of thirty days from the date of the seizure except with the permission of the next higher authority unless they are required for any prosecution under this Act : Provided that the next higher authority shall not give permission to retain such accounts, registers, records or other documents beyond period of sixty days from the date of the seizure.”

7. This sub-section empowers the Officer seizing the documents in exercise of the powers under sub-s. (5) to retain the same beyond period of 30 days from the date of the seizure provided he takes a decision to prosecute within 30 days from the date of the seizure. That that is the intention discernible from the sub-section is clear if we are to read the sub-section without reference to the clause “except with the permission of the next higher authority”. This clause enables the Officer to retain the documents for a period not exceeding 60 days from the date of the seizure provided he has obtained the requisite permission from the next higher authority. The words “required for any prosecution” in the sub-section, as observed by the above Division Bench ruling, would necessarily involve the concept of a decision being reached by the Officer, namely, that these documents are required for the purpose of a prosecution to be lodged. It is true that the Officer can retain the documents beyond a period of 30 days for any prosecution under the Act. But that does not mean that the assessee has no right to obtain even certified copies of the said documents. To my mind, the assessee whose documents are retained for any prosecution under the Act after seizure is entitled to apply for and obtain authenticated copies of the said documents. On such an application being made, the Officer shall provide the applicant with certified copies of the documents within a reasonable time.

Let us see whether the Officer concerned has taken any decision to lodge prosecution against the petitioners within 30 days from the date of the seizure of the documents. It is relevant in this context to refer to the admission of the Officer that no such decision has been taken within the said period. If that be so, the request of the petitioners for the return of the documents ought to have been granted by the Officer concerned.

For the reasons stated above, the following directions are issued: (i) The third respondent is directed to return the documents seized from the premises of the petitioners (as per exhibit P-1) as expeditiously as possible, in any event, within two weeks from the date of receipt of copy of this judgment. (ii) The petitioners shall take photostat copies of these documents and hand them over to the Officer concerned after attesting the same.

It is made clear that this judgment, under no circumstances, will stand in the way of the authority concerned pursuing exhibit P-7 proceedings. Similarly, this judgment will not preclude the petitioners from raising all legal contentions they could raise in the said proceedings.

The original petitions are disposed of as above. Issue photostat copy on usual terms.

[Citation :185 ITR 655]