An order under Section 131 of the Income-tax Act, 1961, or Section 19 (2) of the Foreign Exchange Regulation Act, 1947, directing the production of documents must be based on due application of mind by the authority concerned, considering the relevancy of the documents to the purpose of the Act.

SABYASACHI MUKHARJI, J.

( 1 ) THE petitioner, New Central Jute Mills Ltd. , challenges in this petition under Article 226 of the Constitution the summons dated 6th June, 1969, issued by the Income-tax Officer under Section 131 of the Income-tax Act, 1961. In order to appreciate the controversy it will be necessary to set out certain facts. On the 11th April, 1963, an order was passed under Section 237 (b) (i)/ (ii) of the Companies Act, 1956, appointing an inspector to investigate the affairs of the petitioner-company. On the 12th June, 1964, another order was passed under Section 23. 7 (b) (i)/ (ii) of the Companies Act, 1956, appointing another inspector along with the previous inspector to investigate the affairs of the petitioner-company. On the 30th June, 1964, another order was passed under Section 237 (b) (i)/ (iii) of the Companies Act appointing another inspector in place of the earlier inspector and extending the time for investigation. On the 20th July, 1964, inspectors appointed under Section 237 (b) (i)/ (ii) seized a large number of books, documents and papers pursuant to the warrants obtained by them from the Magistrates under Section 240a of the Companies Act, 1956. On 21st July, 1964, an application was made under Article 226 of the Constitution by the petitioner challenging the appointments of the said inspectors. A rule nisi was issued and an interim order was made. The said matter was Matter No. 272 of 1964 of this hon'ble court. Oil the 23rd July, 1964, another order was passed in the said Matter No. 272 of 1964, whereby the interim order issued on 21st July, 1964, was varied. By the aforesaid order the inspectors were allowed to continue with the search and seizure for four days and thereafter to keep all the seized books, papers and documents with the Registrar of Companies, West Bengal. It was further directed that if the petitioner-company required the documents, books or papers, they would be at liberty to take back the same in the manner provided for in the said order. On the 31st March, 1965, assessment of the petitioner-company for the assessment year 1960-61 was made under Section 23 (3) of the Indian Income-tax Act, 1922. Then, on the 1st April, 1965. the Matter No. 272 of 1964 was heard and hearing was concluded before the learned judge taking the said matter. On the 3rd June, 1965, 'another application under Article 226 of the Constitution was moved by the petitioner-company challenging the search and seizure made by the said inspectors and a Civil Rule 581 (w) of 1965 was issued by this court. On the 4th August, 1965, judgment was delivered in Matter No. 272 of 1964. By the aforesaid judgment the rule obtained by the petitioner-company in the aforesaid matter was discharged. On 29th September, 1965, the peti tioner preferred an appeal against the said judgment dated 4th August, 1965, and there was an interim order by the court of appeal directing [1966] 36 Comp. Cas. 512 (Cal. ). maintenance of the status quo. On 30th March. 1966, assessment of the petitioner-company for the assessment year 1961-62 was completed under Section 23 (3) of the Indian Income-tax Act, 1922. In 1967 assessment of the petitioner-company for the assessment year 1962-63 was made under Section 143 (3) of the Income-tax Act, 1961. On the 5th March, 1968, judgment was delivered in Civil Rule No. 581 (w) of 1965, whereby the warrants issued by the Magistrates authorising the inspectors to conduct the search were quashed. It was further provided in the order that it would suffer such modifications as might be necessary after the appeal in Matter No. 272 of 1964 was disposed of. On the 29th March, 1968, the petitioner's assessment for the assessment year 1963-64 was completed under Section 143 (3) of the Income-tax Act, 1961. On the 7th March 1969, the appeal preferred by the petitioner-company in the said Matter No. 272 of 1964 was allowed by the court of appeal of this court and stay of the operation of the order was grant

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