Appeals Nos
150 154 of 1967
Appeals from the judgment and order dated February 26 1965 of the Madras High Court in Writ Petitions Nos
1321 1495 1496 and 1553 of 1964
SV Gupta Silicitor General V Ramaswamy and A Rangam for the appellant in CAs
Nos 150 153 of 1967
K N Mudaliyar Advocate General Madras V Raniaswaln and A V Rangajn for the appellant in CA No 154 of 1967
NC Chatterjee and R Ganapathy Iyer for the respondents in CAs
150 151 and 154 of 1967
A G Pudissery for the intervener
The Judgment of the Court was delivered by Wanchoo C J
These five appeals on certificates granted by the Madras High Court raise common questions of law and will be dealt with to ether
We shall give brief facts in one of the appeals No 150 of 1967 arising out of writ petition No 1321 of 1964 in order to understand the questions that fall to be decided in the present appeals
On August 19 1964 at about 500 pm the officers of the Commercial Tax Department hereinafter referred to as the Department raided the premises of Zenith Lamps and Electricals Ltd hereinafter referred to as the Company
It is said that the premises were searched and a Suit case was seized and forcibly removed by the officers who made the raid in spite of the fact that they were informed that the box did not contain any papers or documents belonging to the Company and its contents consisted merely of personal effects of one of the Managing Directors namely Shri Ramkishan Srikishan
Jhaver
The raid and search were made by the authorities concerned on information that Shri Geonka one of the Directors of the Company had removed a box containing secret accounts relating to it
The main contention of the petitioner in support of his prayer that the articles seized should be returned to him was under three heads
It was first contended that on a proper construction of section 41 of the Madras General Sales Tax Act No 1 of 1959 hereinafter 151 referred to as the Act the officers of the Department had no authority to search the premises and seize either the account books or the goods found therein
Secondly it was contended that if section 414 authorised seizure and confiscation of goods it was beyond the legislative competence of the State Legislature for it could not be covered by item 54 of list II of the Seventh Schedule to the Constitution relating to taxes on the sale or purchase of goods
 Lastly it was contended that if various provisions in s41 were capable of being construed as authorising search and seizure
the provisions contained therein were unconstitutional in view of article 191 f and g of the Constitution
It is not necessary to refer to the facts in the other petitions which have resulted in the other appeals before this Court because in those cases also there was search and seizure by the officers of the Department and their action is being attacked on the same grounds
All the petitions were opposed on behalf of the State Government and its case was firstly
that s41 authorised search and seizure secondly that the State Legislature was competent to enact s414 under item 54 of list 11 of the Seventh Schedule to the Constitution and thirdly that the provisions in question did not offend article 191 f and g of the Constitution and were in any case protected by article 195 and 6
The High Court held that section 412 did not allow search being made thereunder as it only provided for inspection and that search was a different thing altogether from inspection
The High Court further held that if s41 2 provided for search it would be within the legislative competence of the State Legslature
The High Court took the view that the power of seizure and confiscation of goods contained in sub section 4 could not be said to be ancillary and incidental to the power to tax sale or purchase of goods and therefore this provision was beyond the legislative competence of the State Legislature
Finally the High Court held that sub sections 2 3 and 4 of  section 41 were unconstitutional as they were unreasonable restrictions on the fundamental rights guaranteed under article 191 f and g of the Constitution
Besides the above
the High Court also found with respect to one of the petitions that the search warrant issued for the search of the residential house by the magistrate disclosed that the magistrate had not applied his mind at all to the necessity of the search of he residential house for columns in the printed search warrant which should have been struck out were not so struck out
Further the gaps in the printed form which should have been filled in before the warrant was issued had not been filled in
From these two circumstances the High Court concluded that the search warrant for the residential house had been issued without the application of mind by the magistrate to the necessity of the search of the residential house
The High Court further found that s414 was not complied with strictly before confiscation was ordered and no pro 152 per opportunity was given to the dealer to show that the goods seized and confiscated were not accounted for in his accounts
In the result therefore the High Court allowed all the petitions and directed that the documents things and goods covered by the petitions should be returned to the petitioners along with photographs negatives translations and notes made by the Department from the accounts etc
The State of Madras then applied for and obtained certificates from the High Court to appeal to this Court and that is how the matter has come before us
The same three questions which were raised before the High Court have been raised before us on behalf of the appellant
Before however we deal with them we would briefly refer to the provisions of the Act which are material for our purposes
Section 3 is the main charging section which provides that every dealer whose total turnover for a year is not less than Rs 10000  shall pay a tax for each year at the rate of 2 per cent of his taxable turnover
 The point at which tax has to be paid on single point taxable goods is indicated in the First Schedule to the Act and that will show that in a large majority of cases the tax has to be paid at the point of first sale in the State though in some cases it has to be paid at the point of first purchase or of last purchase in the State
Section 4 is another charging section in respect of declared goods and the Second Schedule to the Act deals with the point at which tax has to be paid in respect of such goods
That Schedule also shows that in a majority of cases the tax had to be paid at the point of first sale in the State though in some cases it has to be paid at the point of first purchase in the State or the last purchase in the State
Certain goods are exempt from the tax under the Act as provided in the Third Schedule and do not thus form part of the taxable turnover though they will be a part of the turnover for purposes of calculating the total turnover per year
The Act provides for registration of firms and of dealers for appointment of officers for collection of tax for the levy of penalty and for appeals and revisions
It also casts a duty on dealers to maintain a true and correct account
Then comes section 41 with which we are particularly concerned
It is in these terms 1 Any officer empowered by the Government in this behalf may for the purpose of this Act
require any dealer to produce before him the accounts registers records and other documents and tot furnish any other in formation relating to his business
2All accounts registers records and other documents maintained by a dealer in the course of his business
the goods in his possession and his offices shops godowns vessels or vehicles shall be open to inspection at all reasonable times by such officer Provided that no residential accommodation not being a place of business cum residence shall be entered 153 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 the Code of Criminal Procedure
1898 Central Act V of 1898
3If 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 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 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
Provided that such accounts registers and documents shall not be retained for more than thirty days at a time except with the permission of the next higher authority
4Any such officer shall have power to seize and confiscate any goods which are found in any office
shop godown vessel vehicle or any other place of business or any building or place of the dealer but not accounted for by tile dealer in his accounts registers records and other documents maintained in the course of his business
Provided that before ordering the confiscation of goods under this Sub section the officer shall give the person affected an opportunity of being heard and make an inquiry in the prescribed manner Provided further that the officer ordering the confiscation shall give the person affected option to pay in lieu of confiscation ain cases where the goods are taxable under this Act in addition to the tax recoverable a sum of money not exceeding one thousand rupees or double the amount of tax recoverable whichever is greater and bin other cases
a sum of money not exceeding one thousand rupees
Explanation It shall be open to the Government to empower different classes of officers for the purpose of asking action under sub sections 1
2 and 3
154 It will be seen from the above brief review of the provisions of the Act that it mainly deals with sales tax to be levied at the point of first sale in the State
though there is also provision for purchase tax in certain cases
It is in this background that we have to consider the construction of s41 of the Act
So far as sub s1 is concerned there is no difficulty
It empowers any officer empowered by the Government in this behalf to require any dealer to produce before him the accounts registers records and other documents and to furnish any other information relating to his business
It may be mentioned here that the Government has empowered all officers of the Department not lower in rank than the Assistant Commercial Tax Officer all officers of the Revenue Department not lower in rank than an Inspector and all officers of the Police Department not lower in rank than a Sub Inspector
to act under s41
sub sections 2 to 4
Presumably
so far as sub section
1 is concerned
only officers of the Department can act under the provision
However there is no dispute with respect to that sub section as the power has to he exercised for the purpose of the Act ie with reference to assessment proceedings at all stages including recovery of tax and prosecution for offences
It is not disputed that the power under sub section
1 can only be exercised to require a dealer to produce accounts etc
relating to his business and not that of any body else
The main dispute centres round the interpretation of sub s2 of s41
The contention on behalf of the respondents is that that provision did not authorise search of premises but merely provided for inspection thereof it all reasonable times by the empowered officer
We shall first deal with the main part of sub section
2 to see what it provides without reference to the proviso
Clearly Sub s2 provides for three things namely 1 all accounts
registers records and other documents maintained by a dealer in the course of his business hall be open to inspection at all reasonable times ii the goods in the possession of the dealer shall also be open to inspection and iii the dealer s offices shops godowns vessels or vehicles shall also be open to inspection
There is no doubt that there are no specific words in sub section
2 giving power of search
But if we read the three powers conferred by sub s2 it should not be difficult to hold that search is included therein
In sub s1 the dealer is required to produce his accounts etc
and to furnish other information relating to his business and it is left to the dealer to produce what accounts he may say he has
The legislature was however cognizant of the fact that a dealer may not produce all accounts or furnish ill information even though required to do so under sub s1
Therefore
sub s2 provides that ill accounts etc
of the dealer shall be open to inspection
It also provides that the dealer s offices
shops godowns vessels or vehicles shall be open to inspection
It is true that generally speaking a power to inspect does not necessarily give power to search
But 155 where as in this case the power has been given to inspect not merely accounts registers records and other documents maintained by a dealer but also to inspect his offices shops godowns vessels or vehicles it follows that the empowered officer would have the right to enter the offices etc
for purposes of inspection
Naturally his inspection will be for purposes of the Act ie for the purpose of seeing that there is no evasion of tax
If therefore during his inspection of offices etc
the empowered officer finds any accounts registers records or other documents in the shop those accounts etc
will also be open to inspection
Reading therefore these two provisions together it is clear that the empowered officer has the right to enter the offices etc
and to inspect them and if on such inspection he finds accounts etc
he has also the power to inspect them
Lind to see if they relate to the business
These two powers taken together in our opinion mean that the em powered officer has the power to search the office etc
and inspect accounts etc found therein
Though therefore the word search has not been used in sub s2 these two powers of entering the offices etc
for inspection and of inspecting every kind of account maintained by a dealer with respect to his business together amount to giving the officer concerned the power to enter and search the offices etc
and if he finds any account in the offices shops etc
to inspect them
Otherwise we can see no sense in the legislature giving power to the empowered officer to enter the offices etc
for the purpose of inspection as the officer concerned would only do so for the purpose of finding out all accounts etc
maintained by the dealer and if necessary to inspect them for the purposes of the Act
We cannot therefore agree with the High Court that there is no power of search whatsoever in sub s2 because the subsection in terms does not provide for search
goods in the possession of the dealer
He has also the power to enter the dealer s offices etc
for the purpose of such inspection Combining these two powers together it follows on the same reasoning that the officer has the power to search for the goods also and to inspect them if found in the offices etc
of the dealer
We have therefore no hesitation in coming to the conclusion that the power of search is implicit in sub s2 with reference accounts etc
maintained by the dealer and the goods in the possession of the dealer
It also seems to us that this power in Sub section 2 is confined to offices shopsgodowns
vessels and vehicles of the dealer and does not go beyond them
It is urged on behalf of the appellant that as the officer is entitled to inspect all accounts etc
maintained by the dealer he can search for them even in the dealer s residential premises
But we do not agree with this conten tion
for we have found the power of search by reading the power of inspection of offices etc
with the power of inspection of accounts etc
and the power of inspection of goods
Sub section
2 does not give any power of inspecting the residential accommodation 156 of the dealer and therefore it cannot be read as giving the power of search of the residential house for purposes of the Act
But whether it is a case of business cum residence the power of search will be there for under sub s2 all offices shops godowns vessels or vehicles of the dealer are open to inspection
Let us now see what light is thrown on the interpretation of sub s2 by the proviso and whether the interpretation we have put on the main part of sub s2 is supported by the proviso
The proviso lays down that i no purely residential accommodation 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 ii that all searches under this sub section shall so far as may be be made in accordance with the provisions of the Code of Criminal Procedure 1898
The latter part of the proviso clearly shows that the main part of sub s2 con templates searches for it refers to all searches made under this sub section
If the reference in the second part of the proviso was confined only to searches made under the first part of the proviso the words would have been all searches under this proviso shall be made in accordance with the provisions of the Code of Criminal Procedure
 The proviso therefore bears out the construction that we have put on the main part of sub s2
But it is urged that a proviso carves out something which is already contained in the main provision and the main provision at any rate does not provide for search of a purely residential accommodation
Therefore the proviso is otiose
That is what the High Court also seems to have held
Generally speaking it is true that the proviso is an exception to the main part of the section but it is recognised that in exceptional cases a proviso may be a substantive provision itself
We may in this connection refer to Bhonda Urban District Council vs Taff Vale Railway Co1 where s51 of the Act there under consideration was framed as a proviso to preceding sections
The Lord Chancellor however pointed out that though s51 was framed as a proviso upon preceding sections but it is true that the latter half of it though in form a proviso is in substance a fresh enactment adding to and not merely qualifying that which goes before
Again in Commissioner of Income Tax vs Nandlal Bhandari  Sons2 it was observed that though ordinarily a proviso restricts rather than enlarges the meaning of the provisional to which it is appended at times the legislature embodies a substantive provision in a proviso
The question whether a proviso is by way of an exception or a condition to the substantive provision or whether it is in itself a substantive provision must be determined on the substance of the proviso and not its form
1 L R 2 196347 157 Finally in State of Rajasthan vs Leela Jain1 the question arose whether the proviso in the Act under consideration there was a limiting provision to the main provision or was a substantive provision in itself
This Court observed that so far as general principle of construction of a proviso is concerned it has been broadly stated that the function of a proviso is to limit the main part of the section and carve out something which but for the proviso would have been within the operative part
 But it was further observed that the proviso in that particular case was really not a proviso in the accepted sense but an independent legislative provision by which to a remedy which was prohibited by the main part of the section an alternative was provided
These three cases show that in exceptional circumstances a proviso may not be really a proviso in the accepted sense but may be a substantive provision itself
It seems to us that the proviso under consideration now is of this exceptional nature
As we have already held there is no provision in the main part of the sub section for searching purely residential premises
Therefore when the proviso provides for such search it is providing for something in dependent of the main part of the sub section
Further the second part of the proviso which talks of searches made under this sub section shows that the power of inspection provided in the main part of the sub section is tantamount to a power of search
We have already come to that conclusion independent of the proviso
All that we need say here is that the proviso also shows that that interpretation is correct
We may add that we are not precluded from looking at the proviso in interpreting the main part of the sub section
We may in this connection refer to the following passage in Maxwell on Interpretation of Statutes Eleventh Edition at p155 where it is observed There is no rule that the first or enacting part is to be construed without reference to the proviso The proper course is to apply the broad general rule of construction which is that a section or enactment must be construed as a whole each portion throwing light if need be on the rest 
The true principle undoubtedly is that the sound interpretation and meaning of the statute on a view of the enacting clause saving clause and proviso taken and construed together is to prevail
 But as we have said already even without looking at the proviso our conclusion is that the main part of sub s2 provides for searches and the proviso merely enforces that conclusion
We therefore cannot agree with the High Court that subsection2 does not provide for search of the business premises of a dealer in the shape of offices etc
1 158 Then we come to sub section3
That provides for the seizure of accounts etc
 if the empowered 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 the Act
If he has such reason he may for reasons to be recorded in writing seize such accounts etc
Now if sub s2 gives power of search sub s3 merely provides further power to seize the accounts etc
found on such search
We have already held that sub s2 gives the power of search and in that case sub s3 is merely complementary to sub s2 and gives the empowered officer the power to seize the accounts found in certain circumstances
If anything sub s3 also bears out that sub s2 must include the power of search for a seizure under sub s3 is not possible unless there is a search
Reading therefore sub s 2 its proviso and sub s3 together we are of opinion that they provide for search and seizure without warrant except that if the place searched is a purely residential accomodation it cannot be searched without a search warrant from a Magistrate
It naturally follows that if it cannot be searched without a search warrant it is not open to the empowered officer to seize anything from a residential accommodation for he cannot enter and search it unless he has a warrant from a Magistrate to do so
The next question relates to the legislative competence of the State legislature to enact sub s4
This subsection provides for seizure and confiscation of any goods found in any office etc including purely residential accommodation after search if they are not accounted for in the accounts maintained in the course of the dealer s business
The sub section thus completes the process which starts with sub section 1 and gives authority to the empowered officer to seize and confiscate goods of the nature indicated therein
The contention on behalf of the respondents is that the power of confiscation provided by sub s4 was not within the competence of the State Legislature under item 54 List II
of the Seventh Schedule relating to tax on sales and purchase of goods
On the other hand
the appellant justifies the power to seize and confiscate goods on the round that it is ancillary and incidental to the power to tax for it is necessary to have such power in order to check evasion of tax and make it unprofitable
The High Court held that the Act was not a law on goods and that a provision for confiscation of goods found on search was neither incidental nor ancillary to the power to tax contained in item 54
List II of the Seventh Schedule
Now it has not been and cannot be disputed that the entries in the various Lists of the Seventh Schedule must be given the widest possible interpretation
It is also not in doubt that while making a law under any entry in the Schedule it is competent to the legislature to make all such incidental and ancillary provisions as may be necessary to effectuate the law particularly it cannot be disputed that in the case of a taxing statute it is open to the legislature to enact provisions which 159 would check evasion of tax
It is under this power to check evasion that provision for search and seizure is made in many taxing statutes
It must therefore be held that the legislature has power to provide for search and seizure in connection with taxation laws in order that evasion may be checked
It is further urged on behalf of the appellant that confiscation of goods which are not entered in accounts is merely a provision of ancillary nature to check evasion of tax by making it unprofitable for dealers to secrete goods in which they are dealing
Reliance in this connec tion is placed on K section Papantna and another vs Deputy Commercial Tax Officer Guntakal1 where the Andhra Pradesh High Court upheld an analogous provision in the Andhra Pradesh General Sales Tax Act No 6 of 1957
in s28 6
We do not propose in the present case to decide the general question whether a power to confiscate goods which are found on search and which are not entered in account books of the dealer is an ancillary power necessary for the purpose of stopping evasion of tax
Assuming that is so we have still to see whether sub s4 of the Act can be upheld read along with the second proviso thereof
It may be added that there is no such provision as the second proviso in s28 of the Andhra Pradesh General Sales Tax Act
We do not therefore propose to express any opinion as to the correctness of the above decision of the Andhra Pradesh High Court
Sub s4 of s41 before it was amended by the Madras General Sales Tax Second Amendment Act
from April 1 1961 had only the first proviso with respect to giving an opportunity of being heard and making an enquiry in the matter before ordering confiscation
By the amendment of 1961 the second proviso was added
That provides that the officer ordering the confiscation shall give the person affected option to pay in lieu of confiscation
in cases where the goods are taxable under the Act
in addition to the tax recoverable a sum of money not exceeding one thousand rupees or double the amount of tax recoverable
whichever is greater
This provision clearly requires the officer ordering confiscation to do two thingsi to order the person concerned to pay the tax recoverable
and ii to pay a sum of money not exceeding one thousand rupees or double the amount of tax recoverable
whichever is greater
We have already indicated that in a large majority of cases covered by the Act the tax is payable at the point of first sale in the State
But under cla of the second proviso the tax is ordered to be recovered even before the sale in addition to the penalty not exceeding Rs 1000 or double the amount of tax recoverable whichever is greater
Therefore cla of the second proviso is clearly repugnant to the general scheme of the Act which in the majority of the cases provides for recovery of tax at the point of first sale in the State
In view of this repugnancy one or other of these two provisions must fall
Clearly it 1967 XIX STC 506
160 is cl
a in the proviso which under the circumstances must fall for we cannot hold that the entire Act must fall because of this inconsistency with respect to recovery of tax under cla of the second proviso even before the taxable event occurs in the large majority of cases which would be covered by the Act
We are therefore of opinion that cla of the second proviso being repugnant to the entire scheme of the Act in so far as it provides for recovery of tax even before the first sale in the State which is the point of time in a large majority of cases for recovery of tax must fall on the ground of repugnancy
It is next urged that in any case the second provisio is severable and therefore only this proviso would fall and not the main part of sub s4
We are however of opinion that cl
a of second proviso is not severable
We have already indicated that originally the second proviso was not there in the Act
It was brought in by the amendment of 1961 and it compels the officer to give the Option and thus compels recovery of tax even in those cases where the tax is recoverable only at the first point of sale in the State which naturally has not occurred in cases of goods seized from the dealer himself
Considering the fact that the legislature added this compulsory proviso later it is clear that the legislature intended that the main part of the section and the second proviso should go together
It is difficult to hold therefore that after the introduction of the second proviso in 1961 the legislature could have intended that the main part of sub s4 should stand by itself
We are therefore of opinion that sub s4 with the two provisos must fall on this narrow ground
We therefore agree with the High Court and strike down sub s4 but for reasons different from those which commended themselves to the High Court
Then we come to the question whether sub ss2 and 3 of s41 of the Act which have been struck down by the High Court on the ground that they are unreasonable restrictions on the right to hold property and to carry on trade have been correctly struck down
The main reason which impelled the High Court to strike down sub s2 was that there was no safeguard provided for search made thereunder
The High Court held that section 165 of the Code of Criminal Procedure did not apply to searches made under sub s2
It also held that the State Government was given the power to empower any officer to make a search under sub s2 and this meant that even an officer of low status could be empowered
Consequently the High Court struck down sub s2 on the ground that it gave arbitrary power of search which could be made even by an officer of low status
It is true that search under this sub section can be made by any officer empowered by Government in this behalf but we have no reason to think that Government will not empower officers of proper status to make searches
In this very case we find that the Government empowered an Assistant Commercial Tax Officer a Revenue Inspector and a Sub Inspector of Police to make searches
Considering the 161 large number of dealers who are covered by the Act it cannot be said that these officers are of such low status that they cannot be depended upon to make a search with due care and caution
We cannot also forget that in a case of this kind the Government cannot find sufficient number of officers of what may be called high status to make searches for dealers who may be covered by the Act may be legion throughout the State and if such searches could only be made by high officers there would not be enough officers available to do so
The fact that the Act gives power to Government to empower any officer is therefore no reason to strike
it down for as we have said the Government will see that officers of proper status are empowered
Nor do we think that an Assistant Commercial Tax Officer or an Inspector of Revenue Department or a Sub Inspector of Police Department is not an officer of proper status to make searches under this provision
We are also of opinion that though sub s2 itself provides no safeguards and might have been open to objection on that ground there is a provision in the proviso to sub s2 which lays down that all searches under this subsection shall so far as may be
be made in accordance with the provisions of the Code of Criminal Procedure
Therefore the provisions of the Code of Criminal Procedure so far as may be apply to all searches made under sub section
It appears that in the High Court the parties as well as the Court assumed that s165 of the Code of Criminal Procedure would not apply to searches under sub s2 We cannot see any warrant for this assumption
The proviso clearly lays down that all searches made under this sub section so far as may be shall be made in accordance with the provisions of the Code of Criminal Procedure
Thus all provisions contained in the Code of Criminal Procedure relating to searches would be applicable to searches under sub s2 so far as may be
Some of these provisions are contained in Chapter VII but one such provision is contained in s165
It is true that that section specifically refers to an officer in charge of a police station or a police officer making an investigation
But when the proviso applies the provisions of the Code of Criminal Procedure to all searches made under this sub section as far as may be possible we see no reason why s165 should not apply mutatis mutandis to searches made under sub s2
We are therefore of opinion that safeguards provided in section 165 also apply to searches made under sub section
These safeguards are i the em powered officer must have reasonable grounds for believing that anything necessary for the purpose of recovery of tax may be found in any place within his jurisdiction ii he must be of the opinion that such thing cannot be otherwise got without undue delay iii be must record in writing the grounds of his belief and iv he must specify in such writing so far as possible the thing for which search is to be made
After he has done these things he can make the search
These safeguards which in our opinion 162 apply searches under sub s2 also clearly show that the power to search under sub section
2 is not arbitrary
In view of these safeguards and other safeguards provided in Chapter VII of the Code apply so far as may be to searsee no reason to hold that the restriction if any on the right to hold property and to carry on trade by the search provided in sub s2 is not a reasonable restriction keeping in view the object of the search namely prevention of evasion of tax
Next we come to sub s3 which as we have already stated is complementary to sub s2
It provides in addition to the safeguards which have to be complied with when a search is made under sub s2 that the officer may seize accounts etc
if he has reason to suspect that any dealer is attempting to evade the payment of any tax etc
due from him under the Act
It also provides that he has to record his reasons in writing and we are of opinion that these reasons have to be recorded before the accounts are seize
It further provides that the dealer shall be given a receipt and this means that the receipt must be given as and when the accounts etc
are seized
Finally it provides that these accounts etc
Shall be retained by such officer so long as may be necessary for their examination and for any enquiry or proceeding under the Act
These in our opinion are sufficient safeguards and the restrictions iS any on the right to hold property and the right to carry on trade by sub s3 must therefore be held to be a reasonable restriction
We may add that the proviso to sub s3 has fixed the period for which the officer seizing accounts can keep them namely  o days at a time and if he wants to keep them for has to take the permission of the next additional safeguard entitling the dealer accounts after every 30 days unless a higher officer has permitted the retention of accounts for a period longer than 30 days
We cannot therefore agree with the high High Court that sub sections
2 and 3 of section 41 of the Act are unreasonable restrictions on the right to hold property or carry on trade for reasons indicated
We are of opinion that they are reasonable restrictions which are protected by cls
5 and 6 of article 19 of the Constitution
We now proceed to consider what order should be passed in the appeals in the view we have taken about the interpretation and validity of sub sections
2 and 3 of section 41 of the Act
We have already indicated that the High Court held that the warrant issued by the Magistrate for search of the residental accommodation was bad because it showed that the Magistrate had not applied his mind to the question of issuing it inasmuch as there were portions which should have been struck out from the printed form and gaps which should have been filled in
But this was not done
163 That conclusion of the High Court has xi4 re n challenged before us
The High Court has further held that a r pr6kr and reasonable opportunity was not given to the persons concerned to show that the goods seized Were not prpperly accounted for in their account books though this findili  is not material now for 9 we have held that sub s4 falls in its entirety
It follows therefore that anything recovered from the search of the residential accom modation on the basis of this defective warrant must be returned
It also follows that anything confiscated must also be returned as we have held that sub s4 must fall
As to the accounts etc
said tot have been seized it appears to us that the safeguards provided under section 165 of the Code of Criminal procedure do not appear to have been followed when the search was made for the simple reason that everybody thought that provision was not applicable to a search under sub s2
Therefore as the safeguards provided in section 165 of the Code of Criminal Procedure were not followed anything recovered on a defective search of this kind must be returned
It follows therefor that the final order of the High Court allowing the writ petitions must stand though we do not agree with the interpretation of the High Court that sub ss2 and 3 are unconstitutional on the ground of their being unreasonable restrictons on the right to hold property and to carry on trade
The appeals therefore fails and are hereby dismissed
In view of our decision on the main question of law we order parties to bear their own costs in all the appeals


Summary:
On August 19 1964 officers belonging to the Department of the appellant raided and searched the premises of a company and foreibly removed certain accounts and goods
The respondents challenged the department s action by writ petitions filed in the High Court under article 226 of the Constitution praying that the articles seized should be returned
It was contended by the petitioners that on a proper construction of section 41 of the Madras General Sales Tax Act No 1 of 1959 the officers of the Department had no authority to search the premises and seize any account books or goods found there that if section 414 authorised seizure and confiscation of goods it was beyond the legislative competence of the State Legislature for it was not covered by item 54 of List II of the Seventh Schedule to the Constitution relating to taxes on the sale or purchase of goods and that if various provisions in section 41 were capable of being construed as authorising search and seizure they were violative of article 191f and g of the Constitution
The High Court allowed the Petitions holding inter alia that section 41 2 did not permit a search being made and only provided for inspection the power of seizure or confiscation in section 414 was beyond the legislative competence of the State Legislature and that subsections 2 3 and 4 of section 41 contained unreasonable res trictions and were violative of article 191 f and g
The High Court also found with respect to one of the petitions that the search warrant had been issued without the application of Mind by the magistrate and was bad
On appeal to this Court Held dismissing the appeal iAnything recovered during the search must be returned to the petitioners for the safeguards provided by section 165 of the Code of Criminal Procedure were not followed and in one case the finding of the High Court that the search warrant issued by the magistrate was bad on various grounds was not challenged furthermore anything confiscated must also be returned as sub section 4 of section 41 must fall163 B D
Clause a of the second proviso to sub section 4 gives power to the officer ordering confiscation to give the person affected an option to pay in lieu of confiscation in cases where the goods are taxable under the Act the tax recoverable and an additional amount and thus provides for recovery of tax even before the first sale in 149 the State which is the point of time in a large majority of cases for recovery of tax
As such it was repugnant to the entire scheme of the Act and sub section 4 must therefore be struck down
As Clause a compels the officer to give the option and thus compels recovery of tax before the first point of sale which cannot have occurred in cases of goods seized from the dealer himself it is clearly intended by the legislature to go together with the main part of the Section and is not therefore severable
159F 16OD
ii Although generally speaking the power to inspect does not give power to search where as in the case of section 41 2 the power has been given to inspect not merely accounts registers records goods etc but also to inspect the offices shops etc
 these two powers together amount to giving the concerned officer the power to enter and search the offices etc
and if he finds any accounts or goods in the offices shops etc to respect them
The High Court was therefore wrong in holding that there was no power of search whatsoever under sub section 2
154H 155E
The proviso to sub section 2 in providing that all searches under this sub section shall be made in accordance with the provisions of the Code of Criminal Procedure bears out the construction that the main part of sub section 2 contemplates searches
Similarly it is clear from sub section 3 which gives power to seize accounts etc in certain circumstances that sub section 2 must include the power of search for a seizure under sub section 3 is not possible unless there is a search
156D E 158B C
The contention that as the main part of sub section 2 does not provide for search of a purely residential accommodation and therefore the proviso is otiose must be rejected
Although generally a provision is an exception to the main part of the section it Is recognised that in exceptional cases as in the present case the provision may be a substantive provision itself
156D F
Bhonda Urban District Council vs Taff Vale Railway Co L R Commissioner of Income tax vs Nandlal Bhandari  Sons  and State of Rajasthan vs Leela Jain
  referred to
iiSub sections 2 and 3 of section 41 are not violative of article 19 as they are protected by clauses 5 and 6 of article 19 of the Constitution
162F G
The High Court had wrongly assumed that the provisions of the Criminal Procedure Code did not apply to a search under section 412
In view of the safeguards provided in section 165 Cr
PC and in Chapter VII of that Code it cannot be said that the power to search provided in sub section 2 is not a reasonable restriction keeping in View the object of the search namely prevention of evasion of tax
161EG
The mere fact that the Act gives power to Government to em power any officer to conduct the search is no reason to strike down the provision for it cannot be assumed that Government will not empower officers of proper status to make searches
160 H To exercise the power of seizure under sub section 3 the officer concerned has to record his reasons in writing has to give a receipt for the accounts seized and can only retain the items seized beyond a period of 30 days with the permission of the next higher officer
These are sufficient safeguards and the restriction if any on 150 the right to hold property and the right to carry on trade by sub section 3 must therefore be held to be a reasonable restriction
162 D G
While the court held that the Legislature has power to provide for search and seizure in connection with taxation law in order that evasion may be checked it did not decide the general question whether a power to confiscate goods which are found on search and which are not entered in account books of the dealer is an ancillary power necessary for the purpose of stopping evasion of tax
159C D
KS Papanna and another vs Deputy Commercial Tax Officer Gunkakal 1967 XIX STC 506 referred to