J.K. Ranka, J.Instant sales tax revision petition by the petitioner-Revenue is directed against order of the Rajasthan Tax Board (for short, "the Tax Board") dated April 10, 2008 by which the appeal filed by the Revenue against the order dated October 19, 2005 passed by the Deputy Commissioner (Appeals) (for short, "the DC (A)") has been dismissed and the order passed by the DC(A) has been sustained. It relates to the assessment year 2000-01. Brief facts of the case are that a survey was conducted on February 19, 2001 by the assessing officer at the business premises of the respondent-assessee and it was noticed that the assessee is dealing in utensils, umbrellas, general kirana goods, etc., and during the course of survey at three floors and eleven godowns of the respondent-assessee, on the basis of the books produced and the actual stock found, it was noticed that the total weight of the steel utensils was 7415 kg. with a value of Rs. 5,19,050 while the goods to the extent of Rs. 3,07,375 were found recorded in the books of accounts and thus excess stock to the tune of Rs. 2,11,675 was found and accordingly penalty under section 77(8) amounting to Rs. 42,350 was levied.

2. The assessee challenged the matter in appeal before the DC (A) who noticed that the search, seizure and survey was not made in the presence of two independent witnesses and further the goods were not physically counted/weighed and were merely recorded on estimate basis and accordingly deleted the penalty.

3. The petitioner-Revenue challenged the matter in further appeal before the Tax Board who also upheld the findings recorded by the DC (A) and came to the conclusion that survey did not take place in the presence of two independent witnesses and even there was no list of physical verification on the file and since the procedure laid down under rule 50 of the RST Rules was not followed, therefore, dismissed the appeal.

The learned counsel for the Revenue contended that the person, who was found present at the time of survey, admitted that the goods were not recorded in the books, purchase bills were not found and even did not produce it later. She contended that when the person, who was responsible on behalf of the respondent-assessee, admitted the discrepancy, the fact that two witnesses were not there, loses its significance and once the assessee himself admits that the goods were unrecorded, even if two witnesses would have been there, it would not have made any vital difference. She contended that the Tax Board has come to a wrong conclusion and substantial question of law arises out of the order passed by the Tax Board.

4. Per contra, learned counsel for the respondent-assessee while controverting the arguments advanced by learned counsel for the petitioner-Revenue, supported the order passed by the Tax Board and submits that the order passed by the Tax Board is in accordance with law and there is no illegality, infirmity or perversity in the order passed by the Tax Board and the order passed by the Tax Board requires no interference.

5. I have considered the arguments advanced by counsel for the petitioner-Revenue and have gone through the material available on record.

6. For the sake of convenience, the provisions of section 77(8) of the RST Act and rule 50 of the RST Rules, are being reproduced ad-infra:

Section 77(8):

"The assessing authority or the officer referred to in sub-section (6) may, after having given the dealer an opportunity of being heard and after having held such further enquiry as it may consider fit, impose on him, for the possession of goods not accounted for, whether seized or not under sub-section (6), a penalty equal to the amount of five times of the tax leviable on such goods or thirty per cent of the value of such goods, whichever is less; and such authority or officer may release the goods, if seized, on payment of the penalty imposed or on furnishing such security for the payment thereof as it may consider necessary."

"R. 50. Procedure for search and seizure under section 77.--(1) The officer who carries out a search under section 77 of the Act, shall adopt the following procedure:--

(a) The officer should record reasons as to why under the facts and circumstances of the case, search is necessary.

(b) Before making a search, such officer shall call upon two witnesses to attend and witness the search and may issue an order in writing to them to do so.

(c) The dealer or the person in-charge of the business place, building or other premises searched, shall be permitted to witness the search.

(d) If any building or place is an apartment in the actual occupancy of a woman, who according to custom does not appear in public, the officer shall afford her every reasonable facility to withdraw.

(e) Search of person may be made, but in case of a woman, it shall be carried out by a woman.

(f) A list of goods, articles and documents seized in the course of the search and of the places in which they were found shall be prepared by such officer and shall be signed by the witnesses. A copy of such list shall be tendered to the dealer or the person concerned and a copy thereof shall be forwarded to the Commissioner within twenty four hours after the completion of such search.

(2) The accounts, registers and documents may be examined without calling witnesses by the officer empowered under section 77, but in the case of seizure thereof, the following procedure shall be adopted:

(a) Seizure of accounts, registers, and documents shall be made in the presence of two witnesses.

(b) While making seizure of accounts, registers and documents, a seizure-memo shall be prepared by such officer and reasons for seizure shall be recorded therein.

(c) The seizure-memo shall also contain the list of the accounts, registers and the documents seized.

(d) The seizure-memo shall be signed by the officer who effects seizure, by the dealer or the person concerned and by the witnesses.

(e) One copy of the seizure-memo shall be tendered by the officer making seizure to the dealer or the person concerned as a token of receipt and one copy thereof shall be forwarded by him to the Commissioner within twenty four hours after such seizure is made."

7. In the instant case, it has been noticed that not only two independent witnesses were not there at the time of search, seizure and survey but it also transpires that the goods were not physically weighed as stock to the tune of 7415 kg. has been found but a finding of fact has been recorded by the Tax Board that the authorized officer could not have inspected three floors of the business premises as also eleven godowns in the given time and record of the assessing officer does not show in what manner the stock has been actually found and weighed by the authorized officer. Merely stating that 7415 kg of utensils has been found is unacceptable. It is further a finding of fact that the utensils contained katori, glass, jag, jar, parat, bhagona, etc., which are of different sizes and of different weights but the authorized officer has weighed such stock on the basis of total weight which appears to be not proper. It is further a finding of fact that the authorized officer has valued the goods at the rate of Rs. 70 per kg. whereas no basis has been given for adopting such rate of Rs. 70 per kg. The Tax Board has also found that as per rule 50 every item is to be weighed separately and a list is required to be made of every item found separately along with its size, etc., but a finding of fact has been recorded that no such list or details was made by the authorized officer. Even the counsel for the Revenue was unable to controvert the above findings.

8. Rule 50 of the RST Rules, referred to supra, postulates that not only the search operation is to be conducted in the presence of two independent witnesses but then the goods have to be weighed in the presence of the two independent witnesses but in the instant case, it is a finding of fact that even on the seizure memo, there is no signature of even one independent witness. When the procedure laid down under section 50 has not been followed by the officers of the petitioner-Revenue, any adverse finding or discrepancy on search loses significance and in such circumstances, the penalty under section 77(8) of the RST Act is not required to be imposed and the Tax Board on aforesaid finding of fact and appreciation of evidence, has come to a definite conclusion that the search was improper and therefore, in my view, no question of law can be said to emerge out of the order of the Tax Board. No perversity is noticed in the order of the Tax Board. Consequently, the instant revision petition, being devoid of any merit, is accordingly dismissed.