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far as may be. Some of these provisions are Conclusion: In Mahesh Chandra v. U.P. Financial
contained in Chapter VII but one such provision is Corpn., (1993) 2 SCC 279 “15. … The exercise of
contained in Section 165. It is true that that section discretion should be objective. Test of
specifically refers to an officer in-charge of a reasonableness is more strict. The public
police-station or a police officer making an functionaries should be duty conscious rather than
investigation. But when power charged. Its
the proviso applies the actions and decisions
provisions of the Code of w h i c h t o u c h t h e
Criminal Procedure to all common man have to be
searches made under tested on the touchstone
this sub-section, as far of fairness and justice.
as may be possible, we
That which is not fair and
see no reason why just is unreasonable. And
Section 165 should not what is unreasonable is
apply mutatis mutandis, arbitrary.
to searches made under
An arbitrary action is
sub-section (2). We are
therefore of opinion ultra vires. It does not
become bona fide and in
t h a t s a f e g u a r d s
g o o d fa i t h m e r e l y
provided in Section 165
also apply to searches made under sub-section (2). because no personal gain or benefit to the person
These safeguards are — (i) the empowered officer exercising discretion should be established. An
action is mala fide if it is contrary to the purpose for
must have reasonable grounds for believing that
which it was authorised to be exercised.
anything necessary for the purpose of recovery of
tax may be found in any place within his Dishonesty in discharge of duty vitiates the action
jurisdiction, (ii) he must be of the opinion that such without anything more. An action is bad even
thing cannot be otherwise got without undue without proof of motive of dishonesty, if the
delay, (iii) he must record in writing the grounds of authority is found to have acted contrary to reason.
his belief, and (iv) he must specify in such writing Therefore, once it is in the knowledge of the
so far as possible the thing for which search is to be Board/CBIC that the proper procedures have
made. After he has done these things, he can make apparently not been followed during search
the search. These safeguards, which in our opinion proceedings and/or the Punchnamas/statements
apply to searches under sub-section (2) also clearly have not been recorded as per extant guidelines
show that the power to search under sub-section and instructions, then it is duty of the Board to keep
(2) is not arbitrary. In view of these safeguards and strict vigil on their own officers and take
other safeguards provided in Chapter VII of the appropriate action against the erring officers,
Code of Criminal Procedure, which also apply so which not only restore the faith of the taxpayers
far as may be to searches made under sub-section but also will ensure, the power of search is not
(2), we can see no reason to hold that the misused by the officers to harass the taxpayers and
restriction, if any, on the right to hold property and not exercised for collateral purpose.
to carry on trade by the 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.”
Life is like a coin. You can spend it any way you wish, but you only spend it once. 26
