The main legal point established in the judgment is that even if a search and seizure of documents or account books is illegal, the documents or materials obtained on search or seizure can be looked into and relied on for the purpose of making the assessment.

The Judgment was delivered by

K.S. PARIPOORNAN, J.

The Revenue is the petitioner in this revision. The respondent is a dealer under the Kerala General Sales Tax Act, 1963. He is doing business in oil. We are concerned with the assessment year 1982-83. The assessee's business place was inspected by the Intelligence Officer, Agricultural Income-tax and Sales Tax, Kannur on October 5, 1982. The verification of the stock with reference to the accounts showed excess of 150 tins in the stock of coconut oil, deficit of 44 tins in the stock of gingelly oil, deficit of 8 tins in the stock of castor oil, excess of one tin in the stock of major refined oil, etc. There was also a deficit of 7 bags in the stock of coconut oil cake and excess of 19 bags in the stock of groundnut oil cake. The inspection took place when the assessee's father, Shri Kunhikannan Nair, was in the shop. A detailed inspection report was drawn. The concerned mahazar is available in page 55 of the files. The representative of the assessee, who was available in the shop, declined to sign in the report or acknowledge receipt of a copy of the report. The Intelligence Officer sent notice to the assessee to produce accounts. He did not respond. The files were handed over to the regular assessing authority. A detailed pre-assessment notice was sent by the Sales Tax Officer, II Circle, Thalasserry, on July 18, 1985 (page 97 of the files). In the pre-assessment notice, amongst others, the assessing authority referred to the inspection by the Intelligence Officer on October 5, 1982, gave details regarding the discrepancies noticed and prima facie found that there was large scale suppression. The assessee filed his objections to the pre-assessment notice. The detailed objection is dated October 25, 1985. The fact that an inspection was conducted on October 5, 1982, was not disputed. The details noted in the inspection report were disputed.

2. The assessing authority made a best judgment assessment on November 6, 1985. The returns filed by the assessee as also the accounts were rejected and a best judgment assessment was effected. From the order of assessment dated November 6, 1985, the assessee filed an appeal before the Appellate Assistant Commissioner, Agricultural Income-tax and Sales Tax. Simultaneous to the assessment proceedings, the assessing authority also initiated proceedings under section 45-A(1)(b) of the Kerala General Sales Tax Act. After affording sufficient opportunity to the assessee, the assessing authority, by order dated November 6, 1985, held that the dealer committed the offence of failure to maintain true, correct and complete accounts and so, a penalty under section 45-A(1)(b) is leviable. A penalty of Rs. 5, 000 was imposed. The assessee filed a revision from the aforesaid order before the Deputy Commissioner of Agricultural Income-tax and Sales Tax, Kannur. By order dated January 3, 1986, the Deputy Commissioner of Agricultural Income-tax and Sales Tax affirmed the levy of penalty. In the revision, the main plea of the assessee was regarding the unreliability of the inspection report dated October 5, 1982. The plea was rejected. It may also be stated that the aforesaid orders passed under section45-A of the Act and affirmed in revision were assailed before this Court in O.P. No. 306 of 1986. A learned single Judge of this Court, by judgment dated October 5, 1990, dismissed the original petition. This Court also found that the assessing authority was fully justified in imposing a penalty of Rs. 5, 000 after rejecting the plea of the assessee that the inspection report cannot be relied on. In the appeal filed against the quantum of assessment, the Appellate Assistant Commissioner, by order dated January 25, 1986, in S.T.A. No. 656 of 1985, affirmed the rejection of the returns and the accounts, after referring to the inspection of the premises on October 5, 1982. However, modification was made in the addition made. The first appellate authorit