The Joint Commercial Tax Officer, Central Intelligence Wing, Board of Revenue (C.T.) vs Purushotham Rungta

Veeraswami, C.J.—This petition involves the question as to whether, where documents have been illegally seized and the court has ordered

them to be returned, but it has allowed photostat copies of the documents to be retained in court in a sealed cover pending further direction, their

user by the department can be permitted. On 11th July, 1972, on the strength of a search warrant issued by the Chief Presidency Magistrate in

R.O.C. No. 4794 of 1972, the residence bearing door No. 24, Nannian Stteet, Park Town, Madras-3, was searched and certain documents

were seized. The application made by one Thiru Daniel, Joint Commercial Tax Officer, Central Intelligence Wing, Board of Revenue, Madras, for

the issue of warrant stated;

I have received information that Thiru Andhra Steel Corporation, No. 304, Thambu Chetty Street, Madras-1, has kept his secret account books,

etc., in his residence at No. 24, Nannian Street, Park Town, Madras-3, relating to his business and as they are required in connection with an

enquiry against him under the General Sales Tax Act, 1959, may be issued with a warrant to search and to recover the books from the place

mentioned u/s 98, Criminal Procedure Code, read with Section 41 of the Mardas General Sales Tax Act, 1959.

A warrant was issued adopting that language. It may be mentioned that the Andhra Steel Corporation has its registered head office at Calcutta

and has a branch at No. 304, Thambu Chetty Street, Madras-1. The petitioner in W.P. No. 2273 of 1972 is one Purushothamlal Rungta, whose

premises are No. 24, Nannian Street, Park Town, Madras-3 and he had nothing to do with the Andhra Steel Corporation, though it appears, his

younger brother, one Sajjan Kumar Rungta, was the manager of that corporation, a company registered under the Companies Act. Purushothamlal

Rungta applied in W.P. No. 2273 of 1972 for a writ of mandamus directing return of the documents to him on the ground that the seizure thereof

was illegal. This matter was heard by a Division Bench, to which one of us was a party. After arguments, the then First Assistant Government

Pleader undertook that the documents would be returned in six weeks. On that basis an order to that effect was made by this court. This order

was dated 15th February, 1973. This order was modified on 28th March, 1973 and as modified, it read :

With reference to our earlier order dated 15th February, 1973, the learned Advocate-General, who appears for the revenue, states that, even if

the originals are handed to the petitioner, certified copies thereof, after comparing with the originals, should be retained in this court in a sealed

cover subject to further directions of this court. We accordingly direct that the original order dated 15th February, 1973, should be complied with

except that certified copies of the originals relating to M/s. Andhra Steel Corporation Ltd., will be kept in the custody of court in a sealed bundle

or cover awaiting further directions from this court.

The present application is for a direction to enable the revenue to make use of the copies and then return them to Purushothamlal Rungta.

Mr. Venugopal, who appears for Purushothamlal Rungta, objects to any such directions being given on three grounds : Firstly, the company has

no residence in Madras as comprehended by the provisions of the Criminal Procedure Code and the branch office of the company at Madras can

in no sense be regarded as the residence of the company. Actually the search was not even in the branch office, but at the residence of

Purushothamlal Rungta, who had nothing to do with the corporation. The fact that the Chief Presidency Magistrate did not apply his mind while

issuing the warrant to these aspects rendered the search and seizure of the documents illegal. Secondly, the seizure of the documents was not

accompanied by a mahazar attested by witnesses as required by the provisions of Section 103 of the Criminal Procedure Code. Thirdly, in any

case, the documents were retained by the revenue beyond 30 days in violation of Section 41(3) of the Madras General Sales Tax Act, 1959.

But we find that there is no controversy before us on the question that the seizure of the documents was illegal. It is not also in controversy that

since the seizure was illegal, the documents are bound to be returned to Purushothamlal Rungta. As a matter of fact, this court has ordered the

originals to be returned, which has been carried out. That being the case, the grounds as raised by Mr. Venugopl for Rungta do not arise for

consideration. But the precise question we are called upon to decide is as to the permissibility of the user, for the purpose of assessment, of the

photostat copies of the originals seized illegally. We have a line of cases in this court consistently taking the view that though the illegally seized

documents have been made use of in a revenue assessment, the order of assessment on that ground will not be rendered illegal or void, because

admissibility of such documents does not depend upon the source or the manner in which they are obtained, but on the relevancy and their

admissibility. One of the earliest cases holding that view is Annamalai Chettiar & Co. v. Deputy Commercial Tax Officer [1965] 16 S.T.C. 687,

decided by one of us. The view was rested on the ratio of Kuruma v. Queen [1955] A.C. 197. But Mr. Venugopal''s contention is that if, before

the revenue makes use of the copies in making the assessment, his client is vigilant enough to come to this court and ask for forbidding of such user,

the revenue cannot resist issuing such direction. In our opinion, in principle, no distinction, if the substance of the matter is borne in mind, can be

drawn from an order passed on illegally seized documents not being rendered void and permissibility of the user of such documents before such an

order is made and in the process of making it. We see no difference between the two, because user and its legality are entirely governed by the

provisions of the Evidence Act and from a certain angle also, in some cases, on the power of the court or the authority concerned to summon

documents from a party or a third party for purposes of making use of them. There is nothing in the Evidence Act which inhibits user of illegally

seized documents ; nor the power of the court or the authority under the law to summon and make use of the documents is restricted to documents

which have been seized lawfully.

It is true that the fundamental right of a citizen to property includes also illegally seized documents and their copies and that no property can be

seized except under the authority of law. But neither of these rights really seems to impinge upon the basic rights under Article 19 and also Article

31 of the Constitution of India. The Fourth and Fourteenth Amendments to the American Constitution have been looked upon or interpreted by

the American Courts in a slightly different way, but not always consistently. In any case, as we have already indicated, the same principle which

holds valid an order which has used illegally seized documents informs the permissibility of the user of such documents in the process of making an

assessment order. That principle is inherent in Kuruma v. Queen [1955] A.C. 197 and also R.S. Jhaver v. Commissioner of Commercial Taxes

[1965] 16 S.T.C. 708 and all the subsequent cases which followed that principle. In fact, it seems to us that the question is concluded by Pooran

Mal Vs. The Director of Inspection (Investigation), New Delhi and Others, . That was a case of an illegal seizure in connection with Income Tax

proceedings. Among others, one of the questions that was decided has a direct bearing to the instant case before us. The Supreme Court, dealing

with that question, held in that case:

However, there was another relief claimed in the petitions and that was for a writ of prohibition restraining the Income Tax department from using

as evidence any information gathered from the search of the articles seized. It would appear from the record that the High Court was prepared to

assume for the purposes of those cases that the search and seizure was illegal. Even so the question remained whether these victims of illegal

search were entitled to a writ of prohibition that the Income Tax authorities shall not use any information gathered from the documents which had

been seized. The High Court held that they were not and proceeded to pass the following identical order in the two cases. It is as follows :

In this case all the documents seized in pursuance of the search warrant have been returned to the petitioners and the only question is whether the

information gathered as a result of such search and seizure could be used in evidence if it be held that the search and seizure was illegal. In

BALWANT SINGH AND OTHERS Vs. R. D. SHAH, DIRECtor OF INSPECTION, Income Tax, NEW DELHI, AND OTHERS., ,

pronounced today, we have held that such information can be used. It is unnecessary, therefore, to pronounce upon the validity of the search and

seizure. This petition, therefore, fails and is dismissed with no order as to costs.

Balwant Singh''s case, referred to above, is reported in BALWANT SINGH AND OTHERS Vs. R. D. SHAH, DIRECtor OF INSPECTION,

Income Tax, NEW DELHI, AND OTHERS., . We understand that an appeal had been filed to this court but was not prosecuted. That decision

not only upheld the constitutionality of Section 132 of the Income Tax Act, but also held that there was nothing in Article 19 of the Constitution

which forbids the use of evidence obtained as a result of an illegal search. Consistently with that view the relief for a writ of prohibition was

rejected and hence the two civil appeals before us.

Then the Court went on to further deal with this matter and then observed:

It, therefore, follows that neither by invoking the spirit of our Constitution nor by a strained construction of any of the fundamental rights can we

spell out the exclusion of evidence obtained on an illegal search.

The Court expressed its conclusion on this matter :

In that view, even assuming, as was done by the High Court, that the search and seizure were in contravention of the provisions of Section 132 of

the Income Tax Act, still the material seized was liable to be used subject to law before the Income Tax authorities against the person from whose

custody it was seized and, therefore, no writ of prohibition in restraint of such use could be granted. It must be, therefore, held that the High Court

was right in dismissing the two writ petitions. The appeals must also fail and are dismissed with costs.

It is clear from this decision that where the party from whom the documents were illegally seized sought for a prohibition against the department

from making use of the information taken out from those documents, the prohibition was refused, the ground being that the department had, in any

case, the power to summon evidence and make use of it and that there is nothing in the Constitution or in the Evidence Act to inhibit user of such

evidence in Income Tax proceedings. We can see no sensible distinction between information taken from documents and copies thereof as to their

user in revenue assessment proceedings.

Our attention was invited to Wazir Chand Vs. The State of Himachal Pradesh, and Commissioner of Commercial Taxes and Others Vs.

Ramkishan Shrikishan Jhaver and Others, , both decided by the Supreme Court. But neither of them actually had to do with the present question

we are deciding in this case. The question of the propriety of user of illegally seized documents was not mooted and decided in those cases. No

doubt, Harikisandas Gulabdas & Sons v. State of Mysore [1971] 27 S.T.C. 434, a decision of the Mysore High Court, expressed a contrary

view. But in taking that view, R.S. Jhaver v. Commissioner of Commercial Taxes [1965] 16 S.T.C. 708 and Commissioner of Commercial Taxes

and Others Vs. Ramkishan Shrikishan Jhaver and Others, appear to have been relied on. So far as Jhaver''s case [1965] 16 S.T.C. 708 was

concerned, the present question was not decided. The prayer in that case was for a simple direction to return the documents illegally seized. The

court was not called upon to decide whether, before returning those documents, the court can permit the user of such documents in revenue

proceedings.

We, accordingly, direct that the revenue will make use of the photostat copies or other copies which are in the sealed cover in this court, which

the Registrar will make available to them and the revenue will return the photostat copies within twelve weeks from to-date.