Sikkim Subba Associates and Teesta Rangit Pvt. Ltd. V. Union of India and Secretary to the Government of India, Ministry of Finance, Department of Revenue and Secretary, Income/Sales Tax Department, Gangtok and Director of Income Tax (Investigation) East and Director of Income Tax (Investigation), New Delhi and Director of Income Tax (Investigation), N.E. Region, Guwahati and Deputy Commissioner of Income Tax, Central Circle IV

WP(C)/10/2004

AI Insights

The case involves two writ petitions filed by M/s. Sikkim Subba Associates and M/s. Teesta Rangit Pvt. Ltd. against the Union of India and various income tax authorities, challenging the legality of search and seizure operations conducted under warrants issued pursuant to Section 132 of the Income Tax Act, 1961. The petitioners argued that the warrants were based on a draft and unsigned report from the Comptroller and Auditor General of India (CAG), which was not legally valid as it had not been laid before the Nagaland Legislative Assembly at the time of the search. The respondents contended that the CAG report was only part of the information used to form the belief necessary for issuing the warrants. The court found that the use of the CAG report for this purpose was unconstitutional and led to the quashing of the warrants and subsequent notices.

• Counselvise Citation: [2005] 140 COUNSELVISE.COM (IT) 808889 (HC-SIKKIM)
• Appeal Type: Others
• Pronouncement Date: 31-05-2005
• Assessment Year: misc
• Other Referred Cases: State of Haryana v. Suman Enterprises, Commissioner of Commercial Taxes v. Ramkrishan Shrikishan Jhaver, Pooran Mal v. Director of Inspection, B.L. Wadhera v. Union of India, Ajit Jain v. UOI, Coca Cola Export Corporation v. ITO, Vindhya Metal Corporation & Ors. v. CIT, Dr. Hand Lal Tahiliani v. CIT, Harmel Singh v. UOI, Ganga Prasad Maheshwari v. CIT, Calcutta Discount Co. Ltd. v. I.T.O., Ganga Saran & Sons Pvt. Ltd. v. I.T.0., L.R. Gupta a Ore. v. UOI, Bradlaugh v. Gossett, Tej Hinn Jain G5 QEs. T. u. Sanjha Reddy & Ore., Kashyap's Parliamentary Procedure, P. V. Narshima Rao v. State |CBI/SPE), Stockdale v. Hansard, Dhirajlal Girdharilal v. C.I.T., Ram Manohar Lohia v. State of Binar, Biju Patnaik v. ITO, Kamal Khosla & Anr. v. Dir. of Income Tax (Inv), Shri M. K. Subba v. State of Nagaland
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A MOULIK; N G SHERPA; J B PRADHAN
• Assessee Lawyers: K N CHAUDHURY; P AGGARWAL; P UPADHYAYA; N RAT; JYOTI KHARKA
• Keywords: CAG report; Illegal; PAC report; Search and seizure; Unconstitutional; Void ab initio; Warrant of Authorisation
• Section: 132; 158BC

Judgement Text

"E= IN THE HIGH COURT 0F SIKKIM WFtlT PET[T[ON (Ct NO.10 0F 2004 M/s. Sikkim Subba Associates, a Registered Partnership flrm having its Registered Office at Subba Building, Siyari, Gangtok, Sikkim -737101. Petitioner. VERSUS 1. Union of India, . represented by the Secretary to the Government of India, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Thesecretary, Income/ Sales Tax Department, Secretariat Annexe I, 1st Floor, Opp. Power Department, Kazi Road, Gangtok -737101. 3. The Director of Income Tax (Investigation) East , Aaykar Bhawan Annexe, P-13, Chowringhee Square, Sid Floor, Kolkata - 700 069. 4. The Director of Income Tax (Investigation), 3rd Floor, E-2, ARA Centre, Jhandewalan Extension , New Delhi - 110 055. 5. The Director of Income Tax (Investigation), N.E. Region, Guwahati. -,,, a `-, 40 rf. dr7, # / i! 2005:SHC:19 `.qB `. a.try dy, :,- 6. The Deputy commissioner of lncome Tax, Central Circle IV, 3rd Floor, E-2, ARA Centre, Jhandewalan Extension, New Delhi - 110 055 .... WRIT pErmoN Ristrondents. NO.11 0F 2004 M/s. Teesta Rangit Pvi. Ltd., through its authorized Signatory, Shri Man Kumar Subba, Son of late D. 8. Subba, having its Registered Office at - Siyari, Gangtok, sildin -737 ioi. Petitioner, VERSUS 1. Union of India, represented by the Secretary to the Government of India, Ministry of Finance, Department of Revenue, North Block, New Delhi. The Secretary, Income/ Sales Tax Department, Secretariat Annexe I, 1st Floor, Opp. Power Department, Kazi Road, Gangtok -737101. The Director of Income Tax (Investigation) East, Aaykar Bhawan Annexe, P-13, Chowringhee Square, 3rd Floor, Kolkata -700 069. 4. The Director of Income Tax (Investigation), 3rd Floor, E-2, ARA Centre, Jhandewalan Extension, New Delhi - 110 055. 2005:SHC:19 i¢J: For the Petitioners 'Ihe Director of Income Tax quvestigation), N.E. Region, Guwahati. ' T'TheDeputyCommissioneroflncomeTax, Central Circle IV, 3rd Floor, E-2, ARA Centre, Jhandewalan Extension , New Delhi - 110 055 .... Resoondents. Mr. K. N. Chaudhury, Senior Advocate assisted by Mr. P. Aggarwal, Mr. P. Upadhyaya, Mr. N. Rat and Miss Jyoti Kharka, Advocates. For the Respondent Nos.1 and 3 to 6. For the Respondent No.2 : Mr. A. Moulik assisted by Mr. N. G. Sherpa, Advocates. Mr. J. 8. Pradhan, Government Advocate. PRESENT : THE HON' BLE SHRI JUSTICE N. SURJAMANI SINGH, ACTING CHIEF JUSTICE. Date of Judgment : 318t May 2005. I H a £-M E HI These two wit petitions involved almost the same and similar common question of facts and law and, as such, this Court propose to dispose of these two writ petitions by this common judgment. . +.rty6 6# 2005:SHC:19 2. These two writ petitions are directed against the issuance of walTant of authorisation dated 17th June 1999 to 23rd June 1999 including warrant of authorisation dated 18th June 1999 by the respondents against the petitioners under Section 132 of the Income Tax Act, 1961, hereinafter referred to as the \"Act\" for conducting search and seizure in the premises of the petitioners arid the consequent issuance of impugned notice dated 20th February 2001 under Section 158BC of the Act directing the petitioners to file returns etc. by treating the search and seizure operations as valid; for which the petitioners have, inter-aJja, prayed that such warrant of authorisation and the impugned notices dated 20th February 2001 issued under Section 158BC of the Act be quashed as the same is unconstitutional, illegal and void ab- initio and consequently, the petitioners have also prayed that the documents/valuable etc. recovered from them during the impugned illegal search and seizure operations carried out by the respondents be returned to them. 3. In Writ Petition No. 10 of 2004, the petitioner has aveITed that it is a partnership firm duly reSstered under the Sikkim Act and having its registered office at Subba Building, Syari, Gangtok, Sikkim. The respondent No.1 is the Union of India; the respondent No.2 is the Secretary, Income/Sales Tax Department, Gangtok, who collects income tax under the d. D+, 2005:SHC:19 Sikkim Act from the residents. Respondent Nos.3 to 5 are Directors of Income Tax (Investigation) situated at Kokata, New Delhi and Guwahati exercising jurisdiction collectively by issuing search warrants on the petitioner and other persons/firms etc. allegedly connected with one firm M/s. M. S. Associates. It is stated that these authorities had acted in concert on the basis of shared information and conducted search and seizure operations at the premises of the petitioner firm at Gangtok. It was further averred that during the relevant period, Shri Moni Kumar Subba was one of the partners of the petitioner firm and his wife Smt. Jyoti Limbu was/is the Manaalng Partner of the firm, M/s. M. S. Associates. The said firm, M/s. M. s. Associates carries on business of selling State organised lotteries and in the past the said M/s. M. S. Associates had been the Sole Distributor of Lotteries organised by various State Governments, namely, Assam, Meghalaya, Nagaland etc. Since 28th September 1993, M/s. M. S. Associates was the Sole Distributor of the Lotteries of the State of Nagaland and the role of the firm was limited to the extent of assisting the concerned State Government to sell its lottery in accordance with the laws laid down by the HonThle Supreme Court in the matter of State of Haryana v. Suman Enterprises reported in (1994) 4 SCC 217. It is further stated that on different dates in the month 1 •. c5¥ 2005:SHC:19 of June 1990, namely 17th to 23rd by different warrant of authorisation issued by the respondent Nos.3 to 5 purportedly acting under Section 132 of the Act, the business premises of M/s. M. S. Associates as well as the residence and ofricial premises of persons allegedly associated with the said rirrn including the petitioner firm were searched and amount of cash, jewellery, investment certificates, fined deposit receipts and other documents were seized. In respect of the petitioner rirm the said searches were also conducted at Gangtok pursuant to the wanant of authorisation dated 18th June 1999 issued by the respondent No.3, which fact is evident from Panchnama dated 23rd June 1999. 4. In Writ Petition No.11 of 2004, the facts whereof are identical, it is stated that the petitioner company is a private limited company incorporated and .registered under the Redrstration of Company Act (Slkkim), 1961 and is ha`ving its registered officer at Syari, Gangtok, Sikkim. The petitioner company was incorporated with the object of undertaking Hotel construction at Gangtok. It is stated that during the relevant period, Smt. Jyoti Limbu, Shri S. R. Subba (brother of Shri M. K. Subba) and Shri M. K. Subba were directors of petitioner company. Smt. Jyoti Limbu is wife of Shri M. K. Subba and was/is the ManaSng Partner of the firm, M/s. M. S. Associates. M/s. M. S. Associates carries on business of a. giv, 2005:SHC:19 selling State organised Lotteries. Since 28th September 1993 the said M/s. M. S. Associates was the Sole Distributor of Lotteries organised by State of Nagaland. In this case also, on different dates in the month of June 1999, namely 17th to 23rd by different warrant . of authorisation issued by the respondent Nos.3 to 5 puxportedly acting under Section 132 of the Act, the business premises of M/s. M. S. Associates as wen as the residence and official premises of persons allegedly associated with this firm including the petitioner company were searched at Gangtok pursuant to the warrant of authorisation dated 18th June 1999 and amount of cash, jewellery, investment certificated, fixed deposit receipts and other documents were seized, which is evident from the Panchnama dated 23rd June 1999. 5. In both these matters, it is a.verred that the search and seizure operations against M/s. M. S. Associates and the persons allegedly associated with them including the petitioners were made on the basis of a preliminary, draft and unsigned report of the Comptroller and Auditor General of India (hereinafter referred to as \"the CAG\") with regard to the business of lotteries of the State of Nagaland in which M/s. M. S. Associates had acted as Sole Distributor. ` cy, 2005:SHC:19 6. Chapter XIV-B consisting of Sections 1588 to 158BH were inserted by the Finance Act, 1995. Relevant portion of Section 158BA of the Act reads as follows: - \"158B(A)(1) Notwithstanding anything contained in any other provisions of this Act, were after the 30th day of June,1995 a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. (2) The total undisclosed income relating to the block period shall be charged to tax, at the rate specified in section 113, as income of the block p.eriod irrespective of the previous year or years to which such income relates and irrespective of the fact whether regular assessment for any one or more relevant assessment years is pending or not ................. \" Sub-section (a) of Section 1588 defines \"block period\" as the period comprising previous year relevant to six assessment years preceding the previous year in which search was conducted under section 132 or any requisition was made under section 132A and also includes the period up to the da.te of the commencement of such search or date flf such requisition in the previous year in which search was conducted or` requisition was made. The expression \"undisclosed inclome\" is defined by sub-section (b) of Section 1588 of the Act. A. 0„ 2005:SHC:19 7. Thus if the search and seizure is valid and legal, assessments can be made by the Assessing Officer by invoking the provisions of Section 158BC of the Act. However, if the search and seizure are invalid and iuegal than assessment cannot be made by tarfug recourse to the provisions of Section 158BC of the Act. 8. In respect of the petitioners, the respondent No.6 issued two. separate notices both dated 20th February 2001 under Section 158BC of the Act purporting to make Block Assessments of the petitioners for the period ending lst April 1989 to 23rd June 1999. By the said impugned notices, the petitioners were directed to prepare true and correct return of its total income including the alleged undisclosed income for the Block Period in respect of which the petitioners are alleged to be assessable for the Block Period. 9. Being aggrieved by the issuance of the impugned notice dated 20th February 2001, the petitioners preferred two separate Writ Petitions being Writ Petition (Civil) No.2890 of 2001 and Writ Petition (Civil) No.2889 of 2001 before the Gauhati High Court. The Gauhati High Court by orders dated 21st April 2001 was pleased to issue Rule and pass orders staying fiirther proceedings pertaining to search and seizure if any against the petitioners and the operation of the impugned notice dated 20th February 2001. In these matter on 6th LJune ` opr, 1 2005:SHC:19 10 2002 before the Gauhati High Court, one Shri Manjit Sin8h, Dy. Director of Income Tax qnvestigation), Guwahati who was not the concerned ofrlcer ffled separate affidavit in opposition and admitted that one of the infomation in possession of the respondents was the report of CAG and that in the present group of cases including the petitioners no separate satisfaction note is required to be prepared and one satisfaction note is sufficient. The High Court of Gauhati by a common fmal judgment and order dated 318t may 2004, dismissed both these writ petitions on the ground of lack of territorial jurisdiction, which led the petitioners filing the present two Writ Petitions b.efore this Court. 10. In both these Writ Petitions, identical averments are made. It is stated that information in possession of the concerned officer on the basis of which the warrants of authorisation was issued and search and seizure operations were carried out was the draft and `unsigned audit report of C.AG against the working of the Directorate of Lotteries of the State of Nagaland for the period from October 1993 to November 1997 when M/s. M. S. Associates was Sole Distributor of lotteries organised by the State of Nagaland. It is luther stated that the report of CAG did not acquire legal authenticity and cannot be construed as \"infomation\" within the meaning of Section 132(1) of the Act as the said GAG +. cpr, 2005:SHC:19 11 report under Article 151(2) of the Constitution of India has to be submitted to the Governor who is required to la.y it before the Legislature of the State. As such, the report of GAG is the property of the house, i.e. I,egislative Assembly of the State of Nagaland under Article 151(2) of the Constitution and the said report cannot be construed or treated as \"information\" on the basis of which authorisation under Section 132 of the Act can be issued as such an act would be, inter-alia, violative of Constitutional mandate. It is further stated that ` the respondent authorities used CAG report in June 1999 much prior to the same being laid before the House, i.e. in August 1999. 11. The GAG report was laid by the Government before the Legislative Assembly in August 1999 and the Legislative Assembly referred the said GAG report in terms of Rule 235 of the Rules of Procedure and Conduct of Business in Nagaland Legislative Assembly to the Public Accounts. Committee (PAC). In March 2002 the PAC has submitted its report to the Legislative Assembly of the State and with regard to the GAG report regarding the working of the Directorate of State Lotteries has held the said GAG report to be unsustainable on facts. The case of the petitioners in the Writ Petitions is that the executive including the respondents cannot assume jurisdiction and conduct investigation over a matter over b, ctry, 2005:SHC:19 12 C3 which the House or its Committee is investigating. It is stated that in any event the fmal report of PAC is binding on the executive. It is further averred that the GAG report has become non-est in view of the PAC report in March 2002 as the GAG report begins and terminates within the walls of the House and is a matter relating to internal procedure of the House. In short, the case of the petitioners is that the respondents cannot rely on the GAG report either in full or in part for the pulposes of conducting search and seizure operations on the betitioners on the basis that there are some allegations in the said report in respect of the firln, M/s. M. S. Associates in which one of the Directors is related to the petitioners by treating the petitioners as a part of the Group of M/s. M. S. Associates. It is further a.verred that the \"information\" in possession of the designated authority was GAG report on the basis of which the said authority formed \"reasons to believe\". It is futher stated that the CAG report could not be in possession of the said authority cannot be used by it on account of the Constitutional embargo and as such the entire search and seizure operations against the petitioners are unconstitutional, illegal, non-est and void ab- initio. It is further stated that if the searches are declared as illegal than the impugned notices issued under Section 158BC both dated 20th February 2001 were liable to be +tory, 2005:SHC:19 13 quashed as they could be issued only if the search and seizure operations are held to be legal and valid. 12. In both these matters, one Shri Raju Lepcha, Asstt. Director of Income Tax (Investigation), Siliguri a subordinate of the designated authority who had issued the impugned warrants of authorisation ffled separate counter affidavits. In the counter affidavit, it is mentioned that the petitioners are fronts opened by Shri M. K. Subba having their main business in New Delhi. In para 3 (vii), 3 (ri), 9,15,18 to 21, it is admitted that report of CAG was in the possession of the authorities and was used for forlning the belief but it was further stated that GAG report was only a portion of information available with the authorities which led to a reasonable belief that the condition precedent for action under Section 132(1) of the Act were fulfilled. It is further stated that the CAG report was not the only basis for the action under Section 132(1) of the Act and apart from the GAG report, the concerned officer had enough material in their possession from which they could from reason to believe for proceeding under Section 132(1) of the Act. Similar admissions have been made in paras 15, 19 to 21 of the counter affidavit. It was further admitted that the said report was used as part of information prior to it being placed in the House, i.e. in August 1999. It was further admitted that the •,...i(:.`-;i. 2005:SHC:19 14 search operation at Gangtok was pursuant to the warrant of authorisation dated 18th June 1999 and was just a part of the nationwide searc'h conducted against the group. 13. Thus the admitted facts are that the concerned ofricer who had formed the requisite belief that conditions exist for the purposes of initiating action under Section `132 of the Act was also guided by the CAG report which was in his possession prior to the same being laid before the Legislative Assembly of the State of Nagaland in August 1999. The said GAG report was thus part of the information in possession of the designated authority for the purposes of initiating action under Section 132 of the Act and one of the basis for forming the requisite belief. As such, prior to the GAG report, being placed on the floor of the Nagaland Legislative Assembly in August 1999, the respondents obtained a copy of the draft and final report of GAG and based on the said GAG report and other information, which is not disclosed in the counter affldavit, the concerned offlcer forlned a belief that conditions exist for the purposes of resorting to the provisions of Section 132 of the Act and conducting search and sei2mre operations on the petitioners. 14. Apart from the GAG report, it is stated during arguments that one of the information in possession of the concerned officer was an alleged interview published in some + giv, i:. 2005:SHC:19 15 magazine \"Rato Gham\" wherein Shri M. K. Subba is alleged to have made tall claims about his wealth/position/status. It was submitted that the said newspaper report was also with the designated authority and was used by the authority to form \"reasons to belief' that conditions exist for the purposes of issuance of the walTants of authorisation under Section 132 of the Act. In the written submissions filed by the petitioners, it is submitted that a Writ Petition no. 508 of 1998 was filed by one Niran Rai before this Court seeking declaration that the said publication \"Rato Ghaln\" was fake. In the Writ Petition No.508 of 1998, interim orders dated 13th November 1998 were passed by this Court directing for a CBI. inquiry. Although interim orders were passed and this Court seized of the matter regarding the genuineness of the said magazine \"Rato Gham\", the respondents despite the pendency of the writ petition and the orders passed took cognizance of the said newspaper reports much later i.e. in June 1999 [paying scant regard to the earlier directions issued] and used the said information for purposes of forming the requisite belief under Section 132 of the Act. It is further submitted that rinally this Court by judgment and order dated llth October 2001 held tliat the said publication was fake and fabricated and issued various directions to authorities. ` +boy, j@' 2005:SHC:19 16 15. The case of the respondents that a fmding in the GAG report can be used against the citizen as there is no bar to suck user under the Constitution. It was further submitted that a copy of the GAG report was forwarded by the GAG to the Union Finance Ministry and as such the concerned officer came into possession of the said GAG report and used the same for forming the requisite belief and as such there is no breach of privilege as the said report was obtained legally. It was further submitted that if GAG report gives indication of evasion of tax than the same can be used by the concerned officer. It is further submitted that the words \"information\" should be given a wide and not restricted meaning and the executive can use all the \"information\" from Legislative documents or proceedings in Legislative Assembly etc. in a civil or a criminal matter and the proceedings before the Legislative Assembly would not be a bar to investigation in any matter. It is further submitted that as there is no legal or constitutional impediments to the use of the GAG report, the action of the respondents cannot be said to be unreasonable or unwalTanted. It is further the case of the respondents that they had 'inforlnation other than GAG report and even if GAG report could not be replied upon, the other inforlnation was sufficient on the basis of which it can be said that the concerned officer rightly formed the requisite belief and +. 6J,?, 2005:SHC:19 ``S. 17 issued the warrants of search and sei2mre under Section 132 of the Act. Thus, the contention of the respondents is that the information can be segregated i.e. GAG report and \"other / information\" and the warrants of authorisation under Section 132 cannot be found fault with if it is based on \"other information\" even if it were to be held that GAG report cannot be said to be information in possession of the concerned olrlcer. 16. I have heard the leaned counsel for the parties to the various issues raised in the pleadings and those specifically argued before me. I have also gone through the written submissions ffled by the parties pursuant to the directions issued by this Court. 17. Shri Chaudhary, leaned Senior Counsel and Shri P. Aggarwal, learned Counsel for the petitioners, inter-alia, made the following submissions: - [a] The information on the basis of which the designated / authority has formed \"reasons to believe should be legal and constitutional and further the possession over such information of the concerned autriority should also be legal, constitutional. The GAG report, which is the property of the House and her to be dealt by the house only cannot constitute a piece of legal and constitutional information to generate the requisite ., + 0?, 2005:SHC:19 18 belief to the desigriated authority for initiating action •imder Section 132 of the Act. Further, no reliance can be p.laced on newspaper reports i.e. Rato Ghank as firstly, the newspaper reports do not constitute \"information\" in the eyes of law and secondly the said magazine Rato Gham was found to be fake by this Court in Writ .Petition No.508 of 1998. H.I The extent of reliance on the report and other information for the purposes of formation of belief cannot be segregated between relevant, legal and constitutional and irrelevant, illegal and unconstitutional. In cases of search and seizure the ground is one i.e. on the basis of the information in his possession, the concerned officer could form the requisite belief that conditions contained in Section 132 exist for issuing search and seizure warants. As the satisfaction of the concerned officer is \"subjectivp satisfaction\" based on the information i.e. documents etc. before him on whicb he forms belief the same cannot be segregated. As such if the designated authority has relied upon the GAG report, which it could not ha.ve relied upon than the entire action, is unconstitutional, illegal and unsustainable. ., -`- .` - 2005:SHC:19 19 [c] As the respondents have neither claimed privilege nor disclosed the other information in their possession [other than GAG report], they are required to provide inspection and give copies of the information in their possession to the petitioners. [d] The counter afridavit has not been filed by persons/a.uthority who had issued the warrants of authorisation and as the formation of belief being a mental satisfaction of the concerned superior officer of the rank as mentioned in Section 132 of the Act, it is that ofricer only who ought to file an affidavit and explain the link between the information in his possession and formation of belief thereon. Further, the affidavit filed on behalf of respondent Nos.3 to 6 is totally vague and does not disclose as to how there is a live link between the information in possession of the authority and the formation of the belief on the basis of the information. [e] There is a distinction between unconstitutional and illegal search and in respect of unconstitutional search as in the present case, the. documents, property etc. seized has to be returned. Reliance was placed on Commissioner of Commercial Taxes v. Ramki_sham Shrikishan .haver reported in LAIR 1968 SC 59 +. 0,, 2005:SHC:19 20 (Constitution Bench) - Pare 19]. The decision reported in AIR 1974 SC 348 was sought to be distinguished. 18. Apart from the arguments of the respondents noted hereinabove that there is no bar in relying on the CAG report and that the information could be segregated i.e. if it is held that GAG report does not constitute valid piece of information, the authorities had sufricient other information on the basis of which the Warrant of authorisation could be sustained on facts and in law. As regards, the contention of the petitioners that \"other information\" which was in the possession of the authorities and which has been disclosed in the counter affidavit should be given by the authorities to them, the respondents submitted that there is no requirement in law that tbe information which led to the formation of the belief of the satisfaction note should be given to the petitioners. As regards, the argument of the petitioners that the counter affidavit ought to have been filed by the concerned officer only to explain the live link between the information and the formation of the belief, the respondents contended that there is no such requirement of law and further affidavit can be filed by a person who is authorised to fie the same. The counsel for the respondents further defended the affidavit ffied and stated that the same is not +. cy, 2005:SHC:19 `£o. 21 vague. The counsel for the respondents further relied on the judgment of the Apex Court .reported in AIR 1974 SC 348 and stated that even if the search is declared illegal, the ' documents, property etc. recovered in such search can be refied upon by the authorities for any other purpose under the Act and that there is no distinction between unconstitutional and illegal search as is being attempted to be made by the petitioners. 19. During the hearings in these matters, the counsel for the respondents supporting their case, handed to the Court three ffles, which cbntained infomation in possession of the concerned officer on which the requisite behef was formed for the purposes of issuance of the warrant of authorisation under Section 132 of the Act. 20. Before dealing with the contentions of the parties, it is pertinent to mention that in these Writ Petitions, the petitioners had averted that the provisions of the Act are not enforced in the State of Sikkim and tha:i.the residents of the State of Sikkim are paying Income Tax under the Sikkim Income Tax Mamlal to the authorities in Sikkim and are not required to pay income tax under the Act of 1961. It was stated that as such the question of the Petitioners being amenable to the provisions of the Act Of 1961 does not arise +, Oy, 2005:SHC:19 22 and consequently, the entire search and seizure operations are void, illegal and non-est. In this regard, the counsel for the Respondent No. 2 i.e. the secretary, Income/Sales Tax Department drew my attention to a communication dated 19.7.2004 of the Central Board of Direct Taxes] Ministry of Finance, North Block, New Delhi addressed to the Chief Commissioner of Income Tax, Jalpaiguri, West Bengal for constitution of a Committee to resolve the differences between the Government of India and the Goverrment of Sikkim on the implementation of Direct Laws in the State of Sikfro. It is further mentioned that the rlfst meeting of the said committee was held on 20th September 2004 under the chairmanship of Shri Beriender, Member qnvestigation), Central Board of Direct Taxes. In the counter affidavit ffied by the Government of Sildrim it is, inter-alia, stated in this regard as follows: - Therefore, it. is factually incorrect to state that the Direct Tax Laws has already been enforced and inplemented in the State of Silckim. It is submitted that the direct tax laws. has not yet been enforced/implemented in the State of Silddm and therefore to resolve this differences the above committees has been constituted by the Ministry of Finance, Goverrment of India. Therefore, the said subject matter is at present before the committee.\" 21. When pointed out, the learned counsel for the petitioners stated that, at present, they are not pressing the argument as to whether the provisions of the act of 1961 are i. Gr, 2005:SHC:19 23 applicable in Sikkim and reserve their rights to do so at an appropriate time either before the authorities or by filing another Writ Petitioh, if required and sought liberty from this Court in this regard as at present the petitioners are confining their arguments to the legality and validity of the search and seizure operations and all consequential actions. I have granted liberty to the petitioners to initiate appropriate action before the authorities or by filing another Writ Petition, if required, and argue that the provisions of the act of 1961 are not applicable to the State of Sikldm as admittedly the residents of Sikkim are not paying any income tax to the Central Government under the Act of 1961 but are paying income tax to the State Government under the State Manual. As such, in the present Petitions I am only deciding the issues with regard to the legality and validity of the search and seizure operations and all consequential actions as prayed for without deciding the.issue of the applicability of the Act of 1961 to the State of Sikkim in the present proceedings. 22. Relevant portion of Section 132 of the Act of 1961 read as under: - \"Section 132. Search and seizure - 1. Where the Director General or Director or the Chief Commissioner or any such Joint Director or Joint Commissioner as may b 2005:SHC:19 "