1981 (6) TMI 123 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the letter issued by the Superintendent of Taxes.
2. Authority of the Superintendent of Taxes to issue directions under the Assam Finance (Sales Tax) Act, 1956, and the Rules.
3. Whether the requirement to submit a prescribed form constitutes an unreasonable restriction on trade.
4. Violation of constitutional rights under Articles 19(1)(g), 301, and 304 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Validity of the letter issued by the Superintendent of Taxes:
The petitioner challenged the validity of the letter dated 7th February 1981, issued by the Superintendent of Taxes, which directed dealers to submit a prescribed form before importing taxable goods into Assam by road. The letter also required the production of this form at check posts. The petitioner argued that this directive was not authorized under the Assam Finance (Sales Tax) Act, 1956, or its Rules.

2. Authority of the Superintendent of Taxes to issue directions under the Assam Finance (Sales Tax) Act, 1956, and the Rules:
The petitioner contended that the Superintendent of Taxes lacked the authority to issue such directions. The learned counsel for the petitioner argued that under Rule 74 of the Assam Finance (Sales Tax) Rules, only the Commissioner could issue instructions to the officer-in-charge of a check post, not to dealers. The petitioner further argued that Section 32 of the Act did not empower the Commissioner to direct dealers to submit any such form.

3. Whether the requirement to submit a prescribed form constitutes an unreasonable restriction on trade:
The petitioner argued that the requirement to submit the prescribed form (annexure B) imposed an unreasonable restriction on trade and was not feasible or practicable. The petitioner cited previous judgments, including Electric & Furnishing Mart v. State of Assam, where similar requirements were deemed ultra vires and quashed.

4. Violation of constitutional rights under Articles 19(1)(g), 301, and 304 of the Constitution of India:
The petitioner claimed that the impugned permit (annexure B) was illegal, void, arbitrary, and violative of the rights guaranteed under Articles 19(1)(g), 301, and 304 of the Constitution. The petitioner argued that the requirement to submit particulars in advance was an unreasonable restriction on the freedom of trade.

Analysis and Judgment:

Validity of the letter and authority of the Superintendent of Taxes:
The court examined the letter and the prescribed form (annexure B). It was noted that the form required dealers to submit certain particulars but did not constitute a permit. The court found that the present case was different from the earlier case of Electric & Furnishing Mart v. State of Assam, as the form in the present case did not seek a permit but only required the submission of particulars. The court held that the letter and the form were consistent with the provisions of Rule 74, which allowed the Commissioner to direct the officer-in-charge of a check post to carry out specific orders.

Unreasonable restriction on trade:
The court held that the requirement to submit the prescribed form (annexure B) was not an unreasonable restriction on trade. The form was a preventive measure to ensure that no dealer evaded tax and was consistent with the provisions of Rules 71, 72, 73, and 74. The court cited several Supreme Court judgments, including Laxmi Khandsari v. State of U.P., which stated that reasonable restrictions could be imposed in public interest and were not necessarily violative of constitutional rights.

Violation of constitutional rights:
The court found that annexures A and B were not violative of Articles 19(1)(g), 301, and 304 of the Constitution. The court held that the measure was regulatory and not restrictive in nature. The court emphasized that the restrictions were reasonable and consistent with the directive principles of State policy, aimed at preventing tax evasion.

Conclusion:
The court concluded that the petitioner's contentions were without merit. The court held that the letter and the prescribed form (annexures A and B) were not violative of the provisions of the Rules or the Constitution. The petition was dismissed, and the rule was discharged without any order as to costs.