Law: Sales Tax Act, 1990

Section: 40, 40A

(a)   Sales Tax Act (VII of 1990)---

----Ss.38 & 40---Raid, search warrant, access to and seizure of business records by FBR---Issuance of search warrant---Precondition of pending proceedings---Scope--The challenge in the present Constitutional petition concerned the legality of the raid, search, and seizure of the petitioner's business records conducted by Inland Revenue authorities under Ss. 38 & 40 of the Sales Tax Act, 1990---The main issue before the High Court was whether, in the absence of any pending proceedings under the Act, 1990, the authorities were justified in obtaining and executing a search warrant and taking custody of the petitioner's documents, or whether such action exceeded the lawful scope of powers conferred under the Act, 1990---Held: In the present case, admittedly the impugned order and the search warrant in question were issued in pursuance of the desk audit analysis highlighting concealment of sales but there were no proceedings pending under the Act, 1990 for which the documents could be useful or relevant, which was a precondition under S. 40 of the Act, 1990 for issuance of search warrant---When there were no proceedings pending under the Act, 1990, the provision of S. 40 of the Act for search could not be invoked---The desk audit analysis could at best be treated as inquiry or investigation but did not amount to proceedings under the Act, therefore, the provision of S. 40 of the Act could not be invoked in the impugned order or search warrant, therefore, to that extent the impugned order and search warrant were not sustainable---Indeed the respondents could neither invoke the provisions of S.40 of the Act nor they could compel production of any record or documents that were not in plain sight or had not been voluntarily made available, however, perusal of the copy of Resumption Memo (appended with reply), showed that same had been duly stamped by the petitioner, as required under S. 38(1) of the Act--Though the petitioner in the present petition had challenged the impugned order and impugned search warrant claiming that the respondent No.4 along with officials and policemen entered its business premises and took away the record but it was nowhere specifically pleaded that said record was not in plain sight or was forcibly taken into custody by respondents---On the other hand, the respondents in their reply though defended the impugned order and search warrant on legal plane yet nowhere stated that the record was made available voluntarily for inspection and taken into custody on request---This being a factual dispute could not be decided in the Constitutional petition, therefore, the respondents were directed to return the data and record as per Resumption Memo to the petitioner after retaining the duplicate copies thereof---Constitutional petition was partially allowed, in circumstances.