Naturally the way in which the authorities acted in this matter has raised several controversial issues. Searches and seizures are extraordinary measures and the fundamental principle for exercise of such powers is that they should be based on definite prior information, lest they may result in harassment and undue spread of terror in the industry, harming its smooth functioning.

If one goes by reports doing the rounds in the market place, this healthy principle seems to have been given a go-bye by the authorities.

According to industry sources, the authorities have been able to collect about Rs 60-65 lakhs. Of this, about Rs 43 lakhs are said to have come from two spinners and theremaining Rs 20-22 lakh from nearly 35-40 units. Soon after these raids, an impression was sought to be created that the authorities had seized yarn worth about Rs 100 crore, indicating a possible tax-evasion amounting to crores of rupees. But it has not been so.

For the release of the seized goods pending investigations, the authorities and texturisers agreed in early August that the former will accept as reasonable the prices up to 10 per cent below those quoted by Reliance Industries and where the difference between this bench-mark and the price mentioned by the texturiser was higher, the party concerned would pay cash deposit at the rate of 34.50 per cent of the price difference.

The process of investigation adopted by the authorities has come under sharp criticism as it threatens to become an instrument of harassment. If the price difference in the case of several parties is marginal, it may go to show that the authorities did not proceed for raids on the basis of definite information against thesefirms and that the raids were unwarranted and misconceived.

It is a moot point whether the authorities should thus use the power of raids and seizures for a roving inquiry. Probably the authorities could have accepted the amount already received as the full and final settlement of the matter and closed this chapter.

It is really surprising that in the name of carrying on further investigations, the authorities are said to be proceeding in a highly arbitrary manner instead of directing such exercise against those in whose cases the price difference was higher than the bench-mark, they have selected an evidently wrong criteria of directing investigations against those having four or more texturising machines though in their case price variation might if at all, be negligible.

Such arbitrary exercise of power unduly harms the business of those against whom such investigations are taken up since their usual clients may turn away from them by way of caution.

The authorities cannot reasonably argue thatthey are least concerned about the smooth functioning of industry and trade, while trying to collect revenue for the government.

The best way to avoid such controversies may be to levy excise duty on the basis of specific rates, or to fix tariff values for its calculation so as to avoid allegations of harassment or corruption.

Inquiries and investigations cannot reasonably be directed against certain centres or selected units, unless the authorities have definite information to act otherwise. Meanwhile, the supply of texturised yarn has suddenly improved with the release of seized goods and improvement in production.

Prices in the domestic market have therefore tended to stabilise around Rs 85 per kg for D-80-84(Weft). While PSF and POY are quoted in the domestic market around Rs 51 and Rs 54 (ex-factory) respectively they are priced abroad around US$0.82 (Rs 36.70) per kg and US$0.95 (Rs 41.36) per kg respectively.

Producers of polyester in the Far East are keeping down their output at present tohold the price line. In case they resume full production, it might be difficult for them to maintain present prices.