1957 (3) TMI 47 - HC - VAT and Sales Tax

Summary

Issues:
1. Constitutionality of the notifications issued by the respondents under the U.P. Sales Tax Act (Amendment) Act (XIX of 1956) and rule 83 of the U.P. Sales Tax Rules.
2. Alleged inconsistency with Article 14 of the Constitution regarding the establishment of check posts for private motor transport.
3. Alleged interference with inter-State trade and inconsistency with Article 304 of the Constitution.
4. Validity of the provision for imposing fines in case of non-compliance with the Act and rules.

Detailed Analysis:
1. The petitioner, a transport company, challenged the notifications issued by the respondents under the U.P. Sales Tax Act (Amendment) Act (XIX of 1956) and rule 83 of the U.P. Sales Tax Rules through a petition under Article 226 of the Constitution. The notifications pertained to the establishment of check posts and barriers to prevent evasion of sales tax and other dues. The petitioner contended that these provisions were void due to inconsistency with Article 14 of the Constitution, which guarantees equality before the law. The court disagreed with this contention, stating that the classification made by the Legislature between private motor transport and railways was reasonable. The court highlighted the different practices and regulations governing goods transport by railways, which justified the need for check posts for private motor transport.

2. The petitioner argued that the establishment of check posts interfered with inter-State trade and contravened Article 304 of the Constitution. However, the court rejected this argument, emphasizing that no restrictions were imposed on the petitioner's trade between Delhi and certain towns in Uttar Pradesh. The only requirement was to file a declaration regarding the transported goods, which could be easily done by filling a prescribed form at the check posts. The court examined the details of the form (Form No. 17) and concluded that it did not unduly restrict the petitioner's business activities. Therefore, Article 304 of the Constitution was deemed irrelevant in this context.

3. Another point raised by the petitioner was regarding the provision for imposing fines in case of non-compliance with the Act and rules. The petitioner contended that the imposition of fines was not authorized by section 28 or rule 83, but was mentioned in a subsequent Notification. The court clarified that the power to impose fines stemmed from section 14 of the U.P. Sales Tax Act, which covered contraventions of the Act and rules. The Notification merely reiterated the existing legal provision for penalties, and no new offense or punishment was created. Thus, the court found no merit in this argument and upheld the validity of the fine imposition provision.

In conclusion, the court dismissed the petition challenging the notifications issued under the U.P. Sales Tax Act (Amendment) Act (XIX of 1956) and rule 83 of the U.P. Sales Tax Rules, ruling that they were constitutional and valid. The court's detailed analysis addressed the petitioner's contentions regarding the classification of transport modes, interference with inter-State trade, and the imposition of fines, ultimately upholding the legality of the provisions in question.