State
Of Punjab & Ors Vs. M/S. Amritsar
Beverages Ltd. & Ors [2006] Insc 476 (8 August 2006)
S.B.
Sinha & Dalveer Bhandari
[Arising
out of SLP (Civil) No. 10371-10374 of 2004] S.B. SINHA, J :
Leave
granted.
Situational
change how far could give rise to a new interpretation of a statutory provision
is the question involved in this appeal which arises out of the judgment and
order dated 21.10.2003 passed by the Division Bench of the High Court of Punjab
and Haryana at Chandigarh in CWP No. 14659 of 2003.
The
Respondent is a dealer within the meaning of the Punjab General Sales Tax Act,
1948 (for short "the Act"). A raid was conducted in his premises and
a larger number of books and documents were seized by the officers of the Sales
Tax Department of the State of Punjab. The
documents were in the form of the cash book ledger or other registers.
They
were contained in a hard disk. Seizure of documents indisputably was done in
exercise of the powers of the authorities under Section 14 of the Act,
Sub-section (3) whereof reads, thus:
-
"Production
and Inspection of Books, Documents and Accounts:
-
***
-
***
-
If any officer
referred to in sub-section (1) has reasonable ground for believing that any
dealer is trying to evade liability for tax or other dues under this Act and
that anything necessary for the purpose of an investigation into his liability
may be found in any book, account, register or document, he may seize such
book, account, register or document, as may be necessary. The officer seizing
the book, account, register or document shall forthwith grant a receipt for the
same and shall
-
In the case of
book, account, register or document which was being used at the time of
seizing, within a period of ten days from the date of seizure, and
-
in any other
case, within a period of sixty days from the date of seizure, return it to the
dealer or the person from whose custody it was seized after examination or
after having such copies or extracts taken therefrom as may be considered
necessary, provided the dealer or the aforesaid person gives a receipt in
writing for the book, account, register or document returned to him. The
officer may, before returning the book, account, register or document, affix
his signatures 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
officers have been affixed on each book, account, register or document"
The officers of the Sales Tax Department asked the Respondents to appear on
several occasions so as to enable them to verify the contents thereof.
Cooperation from the Respondents was not forthcoming as a result whereof the
documents were not returned within the period stipulated thereunder.
A writ
petition was filed by the Respondents herein praying for issuance of a writ of
or in the nature of mandamus directing the Respondents to return the seized
books, accounts, documents, computer disk in terms of the said provision.
Applying the principle of literal interpretation and following an earlier
precedent, the High Court not only issued mandamus as had been prayed for but
also imposed costs of Rs. 2,500/- in each case. It was directed that the costs
would be paid by the officers responsible for withholding the books, accounts,
etc. personally from their pockets and the same shall not be a burden on the
State exchequer.
Contention
of Mr. Sarup Singh, Addl. Advocate General, appearing on behalf of the State of
Punjab, is that Section 14 of the Act is
directory in nature and not mandatory.
Mr.
Vikas Mahajan, learned counsel appearing on behalf of the Respondents, on the
other hand, supported the judgment of the High Court.
Before
adverting to the rival contentions, we may at the outset notice that pursuant
to or in furtherance of the directions of the High Court, the Appellants have
returned the hard disk upon keeping a copy thereof. The Respondents in their
counter-affidavit stated:
"That
it may be mentioned here that dealer was always willing to cooperate with the
department and the only reason for not complying with the notices of assessment
or proceedings taken were that in absence of return of book it was not feasible
or practical to give any statement or verify the entries in the seized
documents.
Although
the seized documents have been returned the answering respondent have no
objection even if now in presence of their representative the departmental
authorities want to obtain any copy of the returned documents.
But this
copy must be counter signed by the representative as well as the
respondents." The Act was enacted in the year 1948. Information Technology
at that time far from being developed was unknown. Constitution of India is a living organ. It had been
interpreted differently having regard to different societal situations. [See
Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I
and Another, (2004) 9 SCC 512, Union of India v. Naveen Jindal and Another,
(2004) 2 SCC 510, John Vallamattom and Another v. Union of India, (2003)
6 SCC 1, and Kapila Hingorani v. State of Bihar, (2003) 6 SCC 1] Same principle is applicable in respect of some
statutes.
Creative
interpretation had been resorted to by the Court so as to achieve a balance
between the age old and rigid laws on the one hand and the advanced technology,
on the other. The Judiciary always responds to the need of the changing
scenario in regard to development of technologies. It uses its own
interpretative principles to achieve a balance when Parliament has not
responded to the need to amend the statute having regard to the developments in
the field of science.
Internet
and other information technologies brought with them the issues which were not
foreseen by law as for example, problems in determining statutory liabilities.
It also did not foresee the difficulties which may be faced by the officers who
may not have any scientific expertise or did not have the sufficient insight to
tackle with the new situation. Various new developments leading to various
different kinds of crimes unforeseen by our legislature come to immediate
focus.
Information
Technology Act, 2000 although was amended to include various kinds of cyber
crimes and the punishments therefor, does not deal with all problems which are
faced by the officers enforcing the said Act.
We may
notice some recent amendments in this behalf. Section 464 of the Indian Penal
Code deals with the inclusion of the digital signatures. Sections 29, 167, 172,
192 and 463 of the Indian Penal Code have been amended to include electronics
documents within the definition of 'documents'. Section 63 of the Evidence Act
has been amended to include admissibility of computer outputs in the media,
paper, optical or magnetic form. Section 73A prescribes procedures for
verification of digital signatures. Sections 85A and 85B of the Evidence Act
raise a presumption as regards electronic contracts, electronic records,
digital signature certificates and electronic messages.
Section
14 of the Act although has been amended, the problem, in our opinion, should be
dealt with keeping in view of the fact that the procedural laws should be
construed to be ongoing statutes similar to the Constitution and, thus,
creative interpretation according to the circumstances is permitted. The Court
in view of development of science has to meet and contend with challenges as an
intermediary between the litigant and the court.
In
SIL, Import, USA v. Exim Aides Silk Exporters, Bangalore, [(1999) 4 SCC 567], notice in terms of Section 138 of the Negotiable
Instruments Act was construed to include notice by fax.
In
State of Maharashtra v. Dr. Praful B. Desai [(2003) 4
SCC 601], this Court opined that recording of evidence through video
conferencing is permissible in terms of Section 273 of the Code of Criminal
Procedure; stating:
"This
Court has approved the principle of updating construction, as enunciated by
Francis Bennion, in a number of decisions. These principles were quoted with
approval in the case of CIT v. Podar Cement (P) Ltd. They were also cited with
approval in the case of State v. S.J. Choudhary. In this case it was held that
the Evidence Act was an ongoing Act and the word "handwriting" in
Section 45 of that Act was construed to include "typewriting". These
principles were also applied in the case of SIL Import, USA v. Exim Aides Silk Exporters 9. In this case the
words "notice in writing", in Section 138 of the Negotiable
Instruments Act, were construed to include a notice by fax. On the same
principle courts have interpreted, over a period of time, various terms and
phrases. To take only a few examples: "stage carriage" has been
interpreted to include "electric tramcar"; "steam tricycle"
to include "locomotive"; "telegraph" to include
"telephone";
"banker's
books" to include "microfilm"; "to take note" to
include "use of tape recorder"; "documents" to include
"computer databases"." The officers of the Sales Tax Department
of the State of Punjab must have felt immense difficulties
in giving effect to the provisions of Section 14 of the Act. It no doubt
mandates the authorities to return to the dealer all documents after
examination or after having such copies or extracts taken therefrom as may be
considered necessary within a period of 60 days of seizure but in the instant case
even for the said purpose, not only a copy was required to be made from the
hard disk, the same was required to be verified. The Respondents were asked by
the authorities of the department that they should come and verify the contents
but they did not do so. Active cooperation of the Respondents was necessary
having regard to the proviso appended to Sub-section (3) of Section 14 of the
Act inasmuch as in terms thereof the officer was entitled not only to affix his
signature and his official seal at one or more places thereupon but also the
dealer was required to give a receipt therefor.
In
case of a hard disk, literal compliance of the said provision was impossible.
Recourse to scientific method, therefore, was necessary.
It may
be true that even in absence of cooperation from the Respondents nothing
prevented the authorities of the Sales Tax Department to make out copies of the
said hard disk or obtain a hard copy and fix their signatures or official seal
in physical form thereupon and furnish a copy thereof to the Respondents.
However, the High Court failed to notice that as problem arose for the first
time, the officers of the Sales Tax Department might not have been able to
formulate or lay down their own procedure as indicated hereinbefore or otherwise.
For
the reasons aforementioned, although we are of the opinion that fulfillment of
the conditions laid down in the proviso contained in Clause (b) of Sub-section
(3) of Section 14 of the Act are imperative in character, the authorities may
take recourse to the aforementioned procedure in respect of seizure of a hard
disk.
We, in
the facts and circumstances of the case, think that it is necessary to explain
the legal position so that the complications arising out of seizure of hard
disk may be avoided in future. The hard disk, however, has already been
returned. We have noticed hereinbefore the offer made by the Respondents and,
thus, the authorities may now ask the representative of the Respondents Company
to make themselves available and obtain his signatures on the receipt or
otherwise of the hard copies; in terms of their undertaking in the
counter-affidavit.
We,
however, set aside that portion of the impugned judgment whereby and whereunder
personal costs have been imposed upon the officers. The appeal is allowed to
the aforementioned extent and with the aforementioned observations and
directions. The parties shall pay and bear their own costs.
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