1971 (2) TMI 108 - HC - VAT and Sales Tax

Summary

Issues:
Constitutionality of section 29 of the Andhra Pradesh General Sales Tax Act empowering seizure and confiscation of goods not covered by a way bill.

Detailed Analysis:

The judgment delivered by the High Court of Andhra Pradesh addressed the constitutionality of section 29 of the Andhra Pradesh General Sales Tax Act, specifically focusing on the power granted to officers to seize and confiscate goods not covered by a way bill. The petitioners challenged the legality of the seizures and subsequent orders confiscating goods and proposing penalties under section 29 of the Act, alleging it to be ultra vires the State Legislature's powers and violative of constitutional provisions.

The court examined the provisions of section 29, which outlined the establishment of check posts or barriers and the inspection of goods in transit. The section empowered officers to seize goods not covered by a proper way bill and levy penalties or confiscate them if the penalty was not paid within the prescribed time. The petitioners argued that these provisions exceeded the State Legislature's legislative competence, while the respondents contended that they fell within the scope of the State's authority under entry 54 of List II of the Seventh Schedule.

The court considered the Supreme Court's ruling in a similar case involving the Madras General Sales Tax Act, where it was held that the power to seize and confiscate goods was not ancillary to the power to tax sales of goods. The Supreme Court's decision emphasized that the power to confiscate goods carried in a vehicle could not be considered incidental to legislating on taxes on the sale or purchase of goods.

In light of the precedent set by the Supreme Court and the absence of contrary decisions supporting the respondents' arguments, the High Court concluded that the provisions of section 29 empowering seizure and confiscation of goods were beyond the State's legislative competence. Therefore, the court held that sub-sections (3) and (4) of section 29 were not valid.

As a result, the court allowed both petitions, granting the writs of certiorari and mandamus as requested by the petitioners and awarding costs. The judgment highlighted the importance of legislative competence and the boundaries within which State powers must operate in matters of taxation and seizure of goods.