Stovekraft Pvt. Ltd. v. Jt. Director, Directorate of Revenue Intelligence
(2007) 214 ELT 179
In the Karnataka High Court
Writ Petition No. 9799/2006
Before Justice Mohan Shantanagoudar
Decided on September 13, 2006

Relevancy: Whether floppy discs, hard drives, and pen drives containing data are goods or electronic records?

Statutes & Provisions Involved
• The Information Technology Act, 2000 (Section 2, 69, 79)
• The Code Of Civil Procedure, 1908 (Section 151)

Relevant Facts

• The business premises of the petitioner was searched by the officers of department of Revenue Intelligence, and in the said process, the officers have seized certain documents, files, hard disks, pen-drives containing data etc., and took the samples of stainless steel sheets as recorded in the mahazars drawn on 14.7.2005, 20.1.2006 and 23.1.12006. The petitioner is engaged in the manufacturing of household appliances like pressure cooker, LPG stove, non-stick kitchenware, and trading in other household appliances. By filing this writ petition, the petitioner has prayed for the return of the goods, records and documents which are seized from its business premises on the ground that the seized goods shall have to be returned back to the person from whom the goods are seized immediately after the lapse of six months.

Prominent Arguments by the Advocates

• Sri Aravind Kumar, learned Asst. Solicitor General, appearing for the respondents, opposed the prayer of the petitioner by contending inter alia that, what are seized under the three mahazars dated 14.7.2005, 20.1.2006 and 23.1.2006 are only the documents, files and certain electronic records like pen drive, data stored in hard disc, representative samples etc., He further contends that as these things do not come within the definition of “goods,” the seizure falls under Section 110(3) and not under Section 110(1) & (2) of the Act. In this view of the matter, according to him, it is not necessary for the Investigating Officer to take permission for retaining the seized materials beyond the period of six months.
• Sri Kiran Javali, learned Counsel for the petitioner by relying upon sub-clause (e) of Clause 22 of Section 2 of the Act contends that the files, documents, floppies, hard disk, and pen drive etc., come within the definition of “goods,” inasmuch as they are the movable properties and that therefore, they should be returned back to the petitioner as they cannot be retained beyond six months as per the mandatory provisions of Section 110(2) of the Act.

Opinion of the Bench

• If the compact disc (CD), hard disk, pen drive, floppy etc. were not filled with any information, then, they could have been treated as goods. In view of the advancement of technology, nowadays, generally, the accounts are maintained in the floppies or hard disks. Hence, they have to be recognised as electronic records.

Final Decision

• No relief of return of documents and things could be granted to the petitioner. Consequently, this Court does not find any merit in the writ petition and the same is liable to be dismissed.

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