PRAKASH KRISHNA J.

( 1 ) THE petitioner, Ravi Iron Industries, is a proprietorship concern which has challenged the legality and validity of the search conducted by the Income-tax Department at the factory of the petitioner on February 16, 2000, and has prayed for a writ, order or direction in the nature of certiorari quashing the search memo/punchanama dated February 26, 2000, and all the proceedings pursuant to and consequential to the said search. A writ in the nature of mandamus directing the respondents not to initiate any proceeding against the petitioner, consequent upon or arising out of the above search has also been sought for.

( 2 ) THE petitioner is engaged in the manufacture of C. I. pipe fittings and main-holds. The petitioner is also a registered licensee under the Central Excise Act and has to maintain detailed records as prescribed under the said Act and the rules concerning purchases, utilisation and stock of raw material, production, clearance and stock of finished goods, etc. These stocks and books of account are being checked by the officials of the central excise department from time to time, including by making surprise visits to the factory.

( 3 ) THE petitioners factory was set up in the year 1971 and has been an income-tax assessee and has indisputably been filing income-tax returns regularly, and the assessments are up to date and have been completed up to the assessment year 1998-99. It has been averred in the writ petition, which has not been denied, that the petitioner has never refused to produce the records or documents or the books of account whenever asked for by the Department during the assessment proceedings and there are no outstanding income-tax dues against the petitioner.

( 4 ) ON February 16, 2000, in the absence of the petitioner the officials of the Income-tax department started search operations simultaneously both at the residential premises of the proprietor of the petitioner as well as on the business premises. The present writ petition is confined to the search so made at the factory premises of the proprietor of the petitioner. During the course of search at the residential premises, the son of the petitioner was informed by the income-tax officials that search operation is also going on at the factory premises. However, he was not allowed to move out of the house. The petitioner in paragraph 40 of the writ petition has stated that there was no information in the possession of the officer issuing the warrant of authorisation for the search which could have led any reasonable person to form an opinion about the existence of undisclosed assets of the petitioner. The warrant of authorisation was issued mechanically, arbitrarily and without application of mind and without forming the opinion about the existence of undisclosed assets as contemplated by Section 132 (1) of the Income-tax act.

( 5 ) A counter affidavit was filed on behalf of the Income-tax Department with the assertion that neither the search was illegal nor is the petitioner entitled to challenge the legality of the said search warrant of authorisation. The respondents have sought to justify their action on the ground that gross suppression of production and sale were detected during the search operations. The production declared in the official record of the petitioner is not even one-fifth the actual production revealed by the seized documents. The allegation that the son of the petitioner was denied a visit to the factory premises, has been controverted in the counter affidavit. It has been stated that the petitioners son, as a matter of fact, was advised to visit the factory premises or depute some responsible officer there, but no heed was paid by him to the said request of the department. It was denied in para. 33 of the counter affidavit that the warrant of authorisation was issued mechanically, arbitrarily or without application of mind.

( 6 ) HEARD learned counsel for the parties and perused the record.

( 7 )

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