The Supreme Court on Monday refused to entertain a public interest litigation (PIL) challenging the scope of search and seizure powers granted to income tax authorities under Section 132 of the Income Tax Act. A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi observed that the statutory provision contains adequate safeguards and was enacted to deal with large-scale tax evasion.
During the hearing, the bench said courts cannot pre-emptively question a statutory provision solely based on apprehensions of misuse. Chief Justice Surya Kant noted that such provisions are often designed to address serious tax evasion cases.
“We cannot second-guess a provision to the extent of the remedy provided. Remedy is good enough for us,” the bench said.
The Chief Justice added that certain legal provisions may initially appear capable of misuse, but they are framed with specific objectives and evolve through judicial scrutiny over time.
“This is an initial apprehension. There are provisions which are sometimes innocuously made but which look like they can be misused… so, courts may have to examine them later. There are provisions which are capable of misuse but are streamlined over time. These provisions are often for the big tax evaders,” the CJI observed.
Senior advocate Sanjay Hegde, appearing in the matter, argued that the provision grants excessive powers to tax authorities and fails to require disclosure of the reasons for conducting a search either to the assessee or to the Income Tax Appellate Tribunal. According to him, this lack of transparency raises constitutional concerns.
Hegde also contended that the scope of the provision could expose individuals beyond the alleged tax evader to coercive action.
“Suppose you go after the lawyer, then you go after the clerk’s phone. Please see, it is not only the evading assessee who is at risk. Anybody in contact is at risk, and the power is kept with the Joint Commissioner,” he submitted.
However, the bench disagreed with the argument that the provision was unconstitutional. Chief Justice Surya Kant stated that the powers granted under the statute are not unchecked.
“This is not an uncontrolled or unwieldy power. Your concerns will go,” he remarked.
Justice Joymalya Bagchi also pointed out practical difficulties in requiring authorities to issue prior notice before conducting searches, particularly in the digital age. He said advance notice could defeat the purpose of investigations.
“If notice is given for search and seizure, there is a potential for destroying the evidence. The best way to snub out such an investigation against the digital record is to destroy the device itself,” Justice Bagchi observed.
Following the court’s observations, the PIL was withdrawn. The bench, however, granted liberty to the petitioner, Vishwaprasad Alva, to submit a representation to the central government seeking modifications or clarifications to the provision.
The petition had challenged the scope of powers under Section 132 of the Income Tax Act, which authorizes income tax officials to conduct search and seizure operations when they have “reason to believe” that a person possesses undisclosed income, assets, or documents.
