Law: Sales Tax Act, 1990

Section: 38,40,40A

(a) Sales Tax Act (VII of 1990)---S. 38---Scope of section 38, Sales Tax Act, 1990---Section 38 empowers an officer authorised by the Central Board of Revenue to have free access to business or manufacturing promises, stocks, business records and documents etc. at any time and the registered person, his agent or any person specified in S.38(1) of the Act shall be bound to answer any question or furnish such information or explanation as may be asked by the authorised officer. (b) Sales Tax Act (VII of 1990)--- ----Ss. 40, 40-A & 38---Search without warrant---Scope---Bypassing the statutory provisions contained in S.40, Sales Tax Act, 1990 and straightaway assuming powers under S.40-A of the Act---Validity---Section 40-A, Sales Tax Act, 1990, in the absence of any strong belief to such effect, did not confer unlimited and unbridled powers on the authorised officer to conduct search or to impound any kind of documents without any reasonable cause and obtaining any search warrant from the Magistrate---Anonymous complaint against the company alleging evasion of tax was not a "credible. information"---"Reasonable belief" of an officer must have direct nexus and material bearing on the strong circumstances for formation of such opinion---Requirements of law and procedure to be followed by the Department with regard to search without warrant elucidated. An officer, duly authorized in this behalf can have free access to the business premises of a registered person. The officer, who inspected the premises, was duly authorized to inspect the goods, stocks etc., as contemplated by law. Nevertheless, from the language employed in sections 40 and 40-A of the Sales Tax Act, 1990, the requirement of law appears to be that where an officer of sales tax has reason to believe that any document or things, which, in his opinion, may be relevant to any proceedings under the Sales Tax Act, are concealed or kept in any place and there is a danger of removal of such documents or records, he may, after obtaining a warrant from the Magistrate, enter that place and cause a search to be made at any time. The mandate of law as enunciated in subsection (2) of S.40 seems to be that…

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