40. Production, inspection and seizure of accounts, documents and goods and search of premises.—

(1) In issuing an order under sub-section (4) of section 55 or in requiring the production by any dealer of his accounts and documents strict regard shall be had to the necessity of not disturbing the accounting procedure of the dealer or the work of his staff any more than is absolutely necessary for the purpose of applying adequate check or ascertaining the required information as the case may be.

(2) Unless the authority acting under sub-section (2) of section 74 in his discretion deems it necessary to make a surprise visit, he shall give reasonable notice in writing to the dealer of his intention to inspect the accounts, registers, documents or stock of goods of such dealer and in fixing the date, time and place for the purpose of as far as possible, be paid to the convenience of the dealer.

(3) (i) Where any authority appointed under section 3 conducts a search under sub-section (4) of section 74, he shall, as far as may be follow the procedure prescribed in the Code of Criminal Procedure, 1973 (Central Act 2 of 1974).

(ii) The application for obtaining authorisation for conducting search at a residential accommodation shall be in Form-58 and such authorisation shall be in Form-59.

(4) When any accounts, registers or documents of a dealer seized by any authority appointed under section 3 have to be returned to the dealer, such return may be made after taking such extracts therefrom, as may be necessary. The authority making the return shall affix its signature or official seal or both on such accounts, registers or documents and the dealer shall give a receipt in acknowledgement, which shall mention the numbers and particulars of the places where the accounts, registers or documents returned to him.

(5) For sale in open auction, as referred to in clause (f) of sub-section (5) of section 74, the following procedure shall apply:-

(a) The authority seizing or detaining the goods shall cause to be published in the notice board of his office a notice under his signature specifying the details of goods seized and intended for sale and also specifying the place where and the date on, and the hour at which the seized or detained goods will be sold in open auction and shall display copies of such list and notice in more than one public place in or around the place in which the goods were seized or detained.

(b) No sale shall take place before the expiry of a period of fifteen days from the date on which the notice is affixed unless the goods are subject to speedy and natural decay.

(c) Intending bidders shall deposit as earnest money a sum equal to 5% of the estimated value of the goods.

(d) At the appointed time, the goods shall be put up in one or more lots, as the authority conducting the auction sale may consider necessary and shall be knocked down in favour of highest bidder, subject to confirmation of the sale by the zonal Deputy Commissioner when the value of the goods exceeds one lakh rupees.

(e) The earnest money deposited by the unsuccessful bidders shall be refunded to them within seven days from the date of auction.

(f) The auction purchaser shall pay the sale value of the goods including sales tax applicable, in cash immediately after the sale and he shall not be permitted to carry away the goods unless the amounts are paid in full. The proceeds shall be remitted into Designated Bank.

(g) The officer receiving the value of the goods in cash shall issue a receipt to the person making such payment.

(h) Where the purchaser fails to pay the purchase money the earnest money deposited by the defaulting bidder shall be forfeited to the Government and the goods shall be resold in the auction. The procedure prescribed for the first auction shall be followed for conducting the subsequent auction.

(i) If any order directing detention is set aside on appeal or revision, the goods so detained, if they have not been sold in auction, shall be released and if they have been sold, the proceeds thereof shall be paid to the owner of the goods, deducting the expenses incurred from the time a detention of the goods to the time they were sold in auction.

(j) Where the amount fetched in auction is more than the amount of the tax, penalty due from the owner of the goods, the surplus after realizing the tax and penalty imposed, the expenses for the conduct of the sale and the expenses and other incidental charges referred to in clause (g) of sub-section (5) of section 74, shall be refunded to person concerned on an application.