State Act

THE KARNATAKA SALES TAX ACT, 1957

28. Powers to order production of accounts and powers of entry, inspection and seizure.- (1) Any officer empowered by the State Government 1[or the Commissioner]1 in this behalf, may for the purpose of this Act, require any dealer carrying on business in any kind of goods 2[or a miller, whether he is a dealer or not]2 to produce before him the accounts and other documents, and to furnish any information relating to the stocks of goods of, or purchases, sales and deliveries of goods by, the dealer and also any other information relating to his business. 1[(2) (i) All accounts and registers maintained by dealers in the ordinary course of their business and documents relating to the stock of goods of, or purchases, sales and deliveries of goods by any dealer, 2[computer hardware and software used for data inputting, processing and storage, of all such information]2 the goods in their possession and their offices, shops, godowns, vessels, receptacles or vehicles, shall be open to inspection at all reasonable times by 3[the officer empowered under sub-section (1)]3. (ii) For the purpose of inspection referred to in clause (i), any such officer shall have power to enter and search any office, shop, godown, vessel, receptacle, vehicle or any other place of business or any building or place where such officer has reason to believe that the dealer keeps, or is for the time being keeping, any accounts, registers or documents of his business: Provided that no residential accommodation (not being a place of business-cum-residence) shall be entered into and searched by such officer except on the authority of a search warrant issued by a Magistrate having jurisdiction over the area, and all searches under this sub-section shall, so far as may be, be made in accordance with the provisions of 1[the Code of Criminal Procedure, 1973 (Central Act 2 of 1974).]1 1[(iii) The power conferred by sub-clause (ii) shall also include,— (a) the power to seal any box or receptacle, godown or building or any part of the godown or building in which accounts or taxable goods are suspected to be kept or stored, where the owner or the person incharge of the business or any other person in occupation either leaves the premises or is not available or fails or refuses to open any box or receptacle, godown or building or any part of the godown or building when called upon to do so. (b) the power to break open the receptacle, godown or building or part of the godown or building where the owner or the person in-charge of the business or the person in occupation leaves the premises or, after an opportunity having been given to him to do so, fails to open the receptacle, godown or building or part of the godown or building. The officer acting under this sub-clause shall prepare a list of the goods and documents found therein.]1 1[(2A) No person shall tamper with any seal put under clause (iii) of sub-section (2).]1 (3) If any such officer has reason to suspect that any dealer is attempting to evade the payment of any tax, fee or other amount due from him under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers, records 1[computer hardware and software]1 or other documents of the dealer as he may consider necessary, and shall give the dealer a receipt for the same. The accounts, registers, records 1[computer hardware and software]1 and documents, so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceeding under this Act: 1[Provided that accounts, registers, records 2[computer hardware and software]2 and other documents so seized shall not be retained by such officer for a period exceeding one hundred eighty days from the date of seizure, unless the reasons for retaining the same beyond the said period are recorded by him, in writing and the approval of the next higher authority is obtained and such approval in any case shall not be for more than sixty days at a time.]1]1 1[(3-A). (i) If any such officer empowered to enter into such office, shop, godown or any other place of business or any building or place where the dealer or miller keeps his stocks, has reason to believe that such dealer or miller is attempting to evade payment of any tax either on his own or in collusion with owner of the goods, he may direct the dealer or miller or the person-in-charge of such office, shop, godown or any other place of business or any building or place where the dealer or miller keeps his stocks, to produce the details regarding the ownership of the goods so stocked and that after verification of the said information if he is of the opinion that further verification is necessary with respect to the accuracy of the particulars furnished in the documents produced, he may verify the particulars himself or, if it is necessary, cause it to be verified by referring the matter to any other officer and if such verification is not likely to be completed within a reasonable time, he may direct in writing the dealer or miller or the person-in-charge of the office, shop, godown or any other place of business or any building or place where the dealer or miller keeps his stocks, not to deliver such goods until permitted to do so by him or such other officer to whom the matter is referred for verification. 1[Provided that the officer shall order for detention of such quantity of goods as in his opinion would be equivalent to three times the amount of tax leviable on such goods.]1 (ii) The verification under clause (i) shall be completed within a period of one month from the date of direction issued under clause (i). Where such verification is not completed within the aforesaid period, the officer who has issued such direction, or the officer to whom the matter is referred for verification, as the case may be, shall obtain the permission in writing of the next higher authority to extend such period for completion of the verification, however such extension shall not be permitted for a period exceeding fifteen days at a time. (iii) Where such officer or other officer to whom the matter is referred under clause (i), upon such verification is of the opinion that the particulars furnished are incorrect, he may proceed against such goods in the custody of the dealer or miller in accordance with clause (iv). (iv) If the empowered officer or the officer to whom the matter is referred under clause (i), upon such verification is of the opinion that the particulars furnished at the time of verification are incorrect and incomplete for which sufficient cause is not furnished, he may 1[levy a penalty which shall not be less than double the amount of tax leviable in respect of the goods stocked,]1 (a) 1[xxx]1 (b) 1[xxx]1 Provided that before levying penalty under this clause, the officer shall give the dealer or miller or person-in-charge of the office, shop, godown or any other place of business or any building or place where the dealer or miller keeps his stocks, a reasonable opportunity of being heard. (v) Where the penalty levied under clause (iv) is not paid, the dealer or miller or person-in-charge of the office, shop, godown or any other place of business or any building or place where the dealer or miller keeps his stocks, shall jointly and severally be liable to pay such penalty and such amount of penalty shall for the purposes of section 13 be deemed to be an amount due under the Act. (vi) Any person aggrieved by the levy of penalty under clause (iv) may, appeal within thirty days from the date on which the notice of penalty was served on the person 1[to the appellate Joint Commissioner]1: 1[(a), (b) x x x]1 Provided that where the person aggrieved is a dealer registered under the Act, such person may appeal to the appropriate appellate authority of the area in which he is registered. (vii) Such appeal shall be dealt with as if it were an appeal filed under section 20 and all the provisions of the said section shall mutatis mutandis apply to such appeal;]1 1[(4) x x x]1 1[(5) It shall be open to the State Government to authorise different classes of officers for the purpose of taking action under 2[sub-section (1) or sub-section (2).]2]1 1[(6) Where such officer, upon examining the accounts registers, records, or other documents seized under sub-section (3), has reason to believe that in respect of any year, the dealer has,- (i) either failed to declare the whole or part of the turnovers recorded in such accounts, registers, records or other documents in the return or the statements submitted in Form-3; or (ii) failed to account for any turnover in the accounts, registers, records or other documents maintained in the regular course of his business, where the return or the statement in Form-3 is not submitted; or (iii) claimed exemption on the turnovers liable to tax in the return or the statements submitted in Form-3; or (iv) admitted to pay a lower rate of tax than that applicable under this Act on the turnovers declared in the return or the statements submitted in Form-3, he may, notwithstanding anything contained in section 12, 12-A or 12-B 1[or that the year to which such turnover relates to has come to an end]1 and without prejudice to the imposition of such tax or penalty or both in the assessment or re-assessment, as the case may be, that may be completed by the assessing authority for that year under the said sections, provisionally assess such turnovers to tax recording reasons for such assessment: Provided that before taking action under this sub-section, the officer shall obtain permission in writing of the 1[Joint Commissioner]1 or the Commissioner: Provided further that before taking action under this sub-section, the dealer shall be given a reasonable opportunity of showing cause against such assessment: Provided also that no provisional assessment under this section for any year shall be made if assessment or re-assessment for that year cannot be made under any of the provisions of this Act. 1[Provided also that no provisional assessment under this Section shall be made in the case of any dealer after one hundred and eighty days from the date of seizure of accounts, registers, records and documents under sub-section (3). Provided also that the officer taking action under this sub-section shall not be below the rank of the assessing authority of the dealer]1 (7) Such officer shall 1[proceed to recover the tax assessed and]1 send a copy of the provisional assessment order to the assessing authority concerned along with such documents as may be necessary, whereupon the assessing authority shall complete the assessment or re-assessment, as the case may be, and impose tax or penalty or both for the year to which such provisional assessment relates on the basis of such materials as are before him. (8) The tax payable under sub-section (6) for any year shall be subject to such adjustments as may be necessary on the completion of final assessment by the assessing authority under section 12 or re-assessment under section 12-A for that year. (9) The provisions of this Act and the rules made thereunder relating to assessment, payment and recovery of tax and appeal, shall mutatis mutandis apply in respect of the tax assessed provisionally under this section.]1