CHAPTER VI

INSPECTION OF ACCOUNTS, SEARCH AND SEIZURE AND ESTABLISHMENT OF CHECK-POST

Section 42: Power to order Production of Accounts and Power of Entry and Inspection

(1) Any officer empowered by the State Govt. in this behalf may, for the purposes of this Act, require any dealer or any other person who carries on business of buying, selling or supplying goods for self or on behalf of other dealer, to produce before him any book, document or account relating to his business or relating to the business of other dealers, and may inspect, examine and copy the same and make such enquiries from the dealer or such person, relating to his business as he considers necessary:

Provided that books, documents and accounts of a period more then five years

prior to the assessment year shall not be so required, unless in any special case for reasons to be recorded such officer considers necessary.

(2) All books, documents and accounts maintained by any dealer and such person in the ordinary course of business, the goods in his possession, and his place of business or vehicle shall be open to search and inspection at all reasonable time by such officers, as may be authorized by the State Govt. in this behalf.

(3) For the purpose of this Section, the officer authorized thereunder may enter and search any place of business or vehicle or any other building or place where he has reason to believe that the dealer keeps or is for the time being keeping, any books, registers, documents, accounts or goods relating to his business and the officer may require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the business-

(i) to afford him the necessary facility to inspect such books of accounts and other documents as he may require and which may be available at such place,

(ii) to afford the necessary facility to check or verify the cash, stock or other valuable article or things which may be found therein, and

(iii) to furnish such information as he may require as to any matter which may be useful for, or relevant to any proceedings under this Act.

Provided that no residential accommodation (not being a place of business-

cum-residence) shall be entered into, inspected or searched by such officer unless specially authorized by the Commissioner in writing.

Explanation: For the purpose of this sub-section, a place where the person is engaged in business will also include any other place in which the person engaged in business or the said employee or other person attending or helping in business states that any of the books of accounts or other documents or any part of the cash, stock or other valuable article or things relating to the business are or is kept.

(4) The officer authorised under sub-section (1) or sub-section (2) may make or cause to be made extracts or copies from books of accounts and other documents inspected by him, make an inventory of any cash, stock or other valuable article or thing checked or verified by him, and record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.

(5) If any officer authorised under sub-section (1) or sub-section (2) has reasonable grounds for believing that any dealer is trying to evade liability for tax or other dues under this Act and that any thing necessary for the purpose of an investigation into his liability may be found in any account, register or document he may seize such account, register or document as may be necessary. The officer seizing the account, register or document shall forthwith grant a receipt for the same and shall be bound to return them to the dealer or the person from whose custody they were seized, within a period of ninety days from the date of such seizure, after having such copies or extracts taken therefrom as may be considered necessary, provided the dealer or the aforesaid person authenticates such copies and extracts, and gives a receipt in writing for the account, register or document returned to him. The officer may, before returning the account, register or document, affix his signature and his official seal at one or more places thereon, and in such case the dealer or the aforesaid person will be required to mention in the receipt given by him the number of places where the signature and seal of such officer have been affixed on each account, register or document.

Explanation: In calculating the period specified in this sub-section the period during which proceeding under this Act remain stayed under the order of any Court or authority shall be excluded.

(6) Notwithstanding any thing contained in sub-seciton (5) the officer seizing any account, register or other document under that sub-section may for the reasons to be recorded by him in writing and with the prior approval of the Commissioner, retain such account, register, or document for such period not extending beyond thirty days from the date of completion of all the proceedings under this Act in respect of the assessment years for which they are relevant as he deems necessary.

(7) An officer authorized to act under sub-section (1) or sub-section (2)-

(i) shall have the power to seal the place of the business, vehicle or any box, almirah or receptacle found on such place of business or vehicle in which he has reason to believe that any account, register or other documents or goods are kept or contained, if the owner or the person in occupation or incharge of such office, shop, godown, vessel, vehicle or box, almirah or other receptacle leaves the place or is not available or fails or refuses to open it when called upon do so;

(ii) where the owner or other person in occupation or incharge of the office, shop, godown, vessel or vehicle or of the box, almirah or other receptacle found in the office, shop, godown,vessel or vehicle is present but leaves the place or after an opportunity having been given to him to do so, fails to open, as the case may be, such office, shop, godown, vessel, vehicle or box, almirah or other receptacle, may break open the same and prepare a list of the goods and documents found therein.

(8) No person shall tamper with any seal put under sub-section (7).

(9) Any officer empowered under sub-section (1) or sub-section (2) may require any person,

(i) who transports or holds in custody, for delivery to or on behalf of and dealer, any goods, to give any information likely to be in his possession in respect of such goods or to permit inspection thereof, as the case may be;

(ii) who maintains or has in his possession any account, book or document relating to the business of a dealer, to produce such account, book, or document for inspection.

(10) Where in the course of any search at the business place of a dealer any book of accounts, other documents, money or goods are found on the possession or control of any person, it shall be presumed, unless the contrary is proved, that such books of account, other documents, money or goods belong to such dealer.

(11) The officer who has made inspection or search or seizure of any books, accounts or documents or investigation or an officer who has made investigations under this section, on the basis of fact found, shall prepare a report in respect of such inspection or search or seizure or investigation and where the officer preparing the report is an officer different from the assessing authority, such officer shall forward a copy of such report to the assessing authority of the dealer.

(12) The assessing authority may require any dealer or a class of dealers to furnish the names, addresses and such other particular as he may find necessary relating to the persons and dealers who have purchased any goods from or sold any goods to such dealer or class of dealers during any given period.

(13) The assessing authority may call for details and particulars from State or Central Government departments and financial institutions including banking companies which, he is of the opinion that, will be relevant and useful for the purposes of this Act.

(14) Notwithstanding the powers of the assessing authority to inspect books of account and enter and search any place of business of any dealer (both registered or unregistered) under this section, the Commissioner, with a view to identify dealers who are liable to pay tax under this Act, may from time to time cause a survey of unregistered dealers to be taken.

(15) The provisions of Section 100 and Section 165 of the Code of Criminal Procedure, 1973 shall, as far as may be, apply in relation to any entry, search or inspection under this Section as they apply in relation to any inspection or search under the said Code.

Section 43: Power to Seize Goods

(1) An officer authorised under sub-section (1) or sub-section (2) of Section 42 shall have the power to seize any goods-

(i) which are found in the dealer’s place of business or vehicle or any other building or place: or

(ii) which, such officer has reason to believe to belong to the dealer and which are found in any place of business or vehicle or building or place, but are not accounted for by the dealer in his accounts or registers or other documents maintained in the course of his business;

Provided that a list of all the goods seized under this sub-section shall be

prepared by such officer and be signed by him, and a copy thereof shall be given to the dealer.

(2) Where any officer empowered by the State Govt. in this behalf has reason to believe that the goods found in any vehicle, building or place are not traced to any bona fide dealer or it is doubtful if such goods are properly accounted for by any dealer in his accounts , register or other documents, maintained in the course of his business, he shall have power to seize such goods and remaining provisions of this section shall mutatis mutandis apply in relation to such seizure.

(3) An officer seizing the goods under sub-section (1) shall take all the measures necessary for their safe custody and forward the list, referred to in the proviso to sub-section(1), along with other documents relating to the seizure to the assessing officer concerned.

(4) The said assessing authority shall serve on dealer, as the case may be, the person incharge of goods at the time of seizure (herein after in this section referred to as the person inchage) a notice in writing requiring him to show cause, why a penalty should not be imposed.

(5) If such officer, after taking into consideration the explanation, if any, of the dealer, or as the case may be, the person incharge and giving him an opportunity of being heard, is satisfied that the said goods were willfully omitted from being shown in the accounts, registers and other documents referred to in sub-section (1), it shall pass an order imposing a penalty not exceeding forty percent of the value of such goods as he deems fit.

(6) A copy of the order imposing penalty under sub-section (5) shall be served on the dealer or, as the case may be, the person in-charge.

(7) The officer seizing the goods shall serve on the dealer or, as the case may be, the person incharge an order in writing mentioning the fact of such seizure and indicating the amount, not exceeding such amount as would be sufficient to cover the penalty likely to be imposed, on the deposit whereof in cash, the goods so seized shall be released in favour of the dealer or, as the case may be, the person in-charge:

(8)Notwithstanding any thing contained in sub-section (7),the Commissioner or such officer, not below the rank of Assistant Commissioner, as may be authorised in this behalf by the Commissioner, may, for sufficient reasons to be recorded in writing, direct that goods be released without any deposit or on depositing such lesser amount, or furnishing security in such form other than cash, as he may deem fit.

(9) The penalty or such part thereof as remains after adjustment of any amount deposited under sub-section (7) shall be deposited in the prescribed manner within thirty days of the date of service of the copy of the order imposing the penalty. In default, the assessing authority shall cause the goods to be sold in such manner as may be prescribed and apply sale proceed thereof toward the penalty and, subject to provisions of Section 36, refund the balance, if any, to the dealer or, as the case may be, to the person -in-charge.

(10) Where the officer seizing the goods, before forwarding the list and other documents referred in sub-section (2) or the assessing authority at any time thereafter, is of opinion that the goods are subject to speedy and natural decay or where the tax assessed or penalty imposed, as the case may be, is not deposited in accordance with provisions of this Act, the officer seizing the goods or the assessing authority, as the case may be, may, without prejudice to any other action that may be taken in accordance with other provisions of this Act, cause the goods to be sold by public auction in the prescribed manner. The sale proceeds of such goods shall be adjusted towards the expenses and tax assessed or penalty imposed. The balance, if any, shall be refunded to the dealer or, as the case may be, the person incharge in accordance to the provisions of sub-section (9).

(11) If the amount deposited under sub-section (7) is more than the amount of penalty imposed under sub-section (5), the excess amount so deposited shall be refunded to the dealer or, as the case may be, the person incharge, by the officer with whom it was so deposited in accordance with the provisions of Section 36.

Section 44: Power to Acquire Goods in case of Under Valuation-

(1) Where the assessing authority or an officer empowered under Section 42, is satisfied that any dealer bringing, importing or otherwise receiving into the State from any place outside the State any goods has, with a view to evade payment of tax, shown the estimated sale value of such goods in the declaration form for import accompanying such goods less than fair price of such goods or has not shown the estimated sale value in such form and the presumed sale value of such goods is less than the fair price of such goods, such officer may acquire such goods on payment of 110 percentum of such estimated sale value or presumed sale value, as the case may be, to the dealer.

(2) The power under in sub-section (1) shall not be exercised unless the dealer is afforded an opportunity of being heard.

(3) The notice printed on the declaration form shall be deemed to be a notice for the purpose of sub-section (2) and no fresh notice shall be required to be given for hearing to the dealer.

(4) The goods acquired under sub-section (1) shall be disposed of in such manner as may be specified by the Commissioner.

Explanation: For the purpose of this Section-

(i) “fair price” shall mean the value determined in such manner as may be specified by the Commissioner;

(ii) presumed sale value shall be equal to 110 percentum of the purchase price shown in the declaration form.

Section 45: Power to seek Information, to summon Witness etc.

(1) Any officer under this Act, not being an officer below the rank of an officer appointed and posted by the Commissioner, may for any purpose related to the administration or enforcement of the provisions of this Act by notice, require any dealer or other person to furnish any information or any document including electronic records which may be in his knowledge or possession. Whenever so required, the dealer or such person shall furnish correct, complete and true information.

(2) All such officers under this Act shall have the same power as are vested in a Court under the Civil Procedure Code 1908, when trying a suit in respect of following matters, namely-

(i) Enforcing the attendance of any person and examining him on oath or affirmation,

(ii) Compelling the production of documents, and

(iii) Issuing commission for examination of witness;

and any proceeding before any of the officers aforesaid shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 and for the purpose of Section 196 of the Indian Penal Code.

(3) Summons for the production of documents or the attendance of any person shall be issued in the prescribed form.

Section 46: Power to seek Assistance from Police etc.

An officer exercising power under Section 42, section 43, Section 48 may take the assistance of police or other officer or officers of the State.

Section 47: Establishment of Check-Posts and Barriers-

The State Govt. if it is of the opinion that it is necessary so to do with a view to preventing evasion of tax or other dues payable under this Act in respect of the sale of goods within the State after their import into the State may, by notification in the Gazette, direct establishment of check-posts or barriers at such places within the State as may be specified in the notification.

Section 48: Import of Goods into the State against Declaration-

(1) Any person (hereinafter in this Section referred to as the importer) who intends to bring, import or otherwise receive, into the State from any place outside the State, any goods other than the goods exempted under the provisions of this Act exceeding such quantity or measure or of such value as may be notified by the State Government in that behalf, shall obtain the prescribed form of declaration or certificate from his assessing authority.

Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate.

(2) Where such goods are to be consigned by road-

(i) the importer shall furnish to the consignor the declaration in the prescribed form in duplicate duly filled in and signed by him, and the driver or any other person incharge of any vehicle carrying any such goods shall carry with him the copies of such declaration duly verified by the consigner in the prescribed manner together with such other documents as may be prescribed and shall deliver one copy of such declaration-

(a) where such goods are brought by road on which check-post or barrier is established under Section 47, to the officer incharge of such check-post or barrier before crossing the check-post or barrier, and

(b) where such goods are brought by road on which no check- post or barrier is established, to the officer incharge of the nearest check-post or barrier established under the said Section,

before transporting such goods further within the State and the other copy of declaration and the remaining documents along with the goods to the importer or his agent.

(ii) the officer incharge of the check-post or barrier shall grant a receipt for the copy of declaration delivered to him and it shall not be necessary for the driver or the person incharge of the vehicle to deliver any copy of the declaration at any other check-post or barrier that he may cross if he shows such receipts to the officer incharge of such other check-post or barrier.

(iii) the importer shall preserve the other copy of declaration and other documents delivered to him or his agent under clause (i) for such period as may be prescribed and produce them before the assessing authority whenever demanded by it within such period.

(3) Where such goods are brought into the State as personal luggage, the person bringing them shall carry with him the declaration in the prescribed form duly filled in and signed by the importer and the importer shall submit the same for endorsement by the officer authorised in this behalf by the next working day.

(4) Where any person intends to bring, import or otherwise receive in the State from any place without the State, any goods referred to in sub-section (1) otherwise than in connection with business and obtains the prescribed form of certificate, the provision of sub-section(2) and sub-section(3) shall, mutatis mutandis apply as if the word “certificate” is substituted for the word “declaration” used therein.

(5) The driver or other person incharge of any vehicle carrying any goods referred to in the preceding sub-sections shall stop the vehicle at every such check-post or barrier, or when so required by an officer authorised under sub-section (1) or sub-section (2) of Section 42, at any place, and keep it stationary for so long as may be considered necessary by the officer incharge of the check-post or barrier or the officer authorised under sub-section (1) or sub-section (2) of Section 42, as the case may be, and allow him to search the vehicle and inspect the goods and all documents referred to in the preceding sub-sections and shall, if so required, give his name and address and the names and addresses of the owner of the vehicle and of the consigner and consignee of the goods.

(6) Where the officer making the search or inspection under this Section finds any person transporting or attempting or abetting to transport any goods to which this Section applies without being covered by proper and genuine documents referred to in the preceding sub-sections and if, for reasons to be recorded, he is satisfied, after giving such person an opportunity of being heard that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods.

(7) The provisions of sub-section (3), sub-section (6) and sub-section (10) of Section 43 shall mutatis mutandis apply to such detention as they apply to seizure under this Section.

Section 49: Import of Goods into the State by Rail, River, Air, or Post-

(1) Where any goods (other than the goods exempted under the provisions of this Act) exceeding such quantity, measure or value as may be notified with reference to sub-section (1) of Section 48, are consigned by rail, river, air or post from any place out side the State, the importer shall not-

(i) obtain or cause to be obtained delivery thereof, unless he furnishes or cause to be furnished to such officer as may be authorised in this behalf by the State Govt. a declaration in the prescribed form in duplicate duly filled in and signed by him for endorsement by such officer; and

(ii) after taking delivery, carry the goods away or cause the goods to be carried away from the railway station, steamer or boat station, air port or post office , as the case may be, unless a copy of declaration duly endorsed by such officer is carried with the goods

(2) The provisions of sub-section (3), sub-section (4) and sub-section (6) of Section 48 shall mutatis mutandis apply in respect of goods consigned by rail, river or post as they apply to import of goods by road under that Section.

(3) Nothing contained in this Section shall be construed to impose any obligation on any railway administration or railway servant or post office or any officer of post office, or to empower any search, detention or seizure of any goods while on railway as defined in the Indian Railways Act, 1890, or in a post office as defined in the Indian Post Office Act,1898.

(4) The provisions of sub-section (3), sub-section (6) and sub-section (9), of Section 43 shall mutatis mutandis apply to such detention as they apply to seizure under that Section.

Section 50: Transit of Goods by Road through the State and issue of

Authorisation for Transit of Goods-

(1) When a vehicle coming from any place outside the State and bound for any other place outside the State, and carrying goods referred to in sub-section (1), of Section 48, passes through the State, the driver or the person incharge of such vehicle shall obtain in the prescribed manner an authoristion for transit of goods from the officer incharge of the check post or barrier after his entry into the State and deliver it to the officer incharge of the last check post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person incharge of the vehicle:

Provided that where the goods carried by such vehicle are, after their entry into the State, transported outside the State by any other vehicle for conveyance, the onus of proving that goods have actually moved outside the State shall be on the owner or the person incharge of the vehicle.

(2) In such a case the owner of the vehicle, the transporter, the person-in-charge and the hirer of the vehicle, shall jointly and severally be liable to pay tax on such presumed sale of goods and also for payment of amount of penalty that may be imposed under the provisions of this Act.

Explanation: For the purpose of this Section the hirer of the vehicle shall also be deemed to be the owner of the vehicle.