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TMI Blog1961 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... SARKAR A.K., WANCHOO K.N., DAS GUPTA K.C. AND RAJAGOPALA AYYANGAR N. JJ. Sardar Bahadur, Advocate, for the petitioners. C.K. Daphtary, Solicitor-General of India (R. Ganapathy Iyer and T.M. Sen, Advocates, with him), for the respondents. -------------------------------------------------- The Judgment of the Court was delivered by WANCHOO, J. -These eleven petitions raise a common point and will be disposed of together. The brief facts necessary for present purposes are these. The petitioners are dealers in motor spirit in Hyderabad. In 1949 the Hyderabad Sales of Motor Spirit Taxation Regulation, No. XXIV of 1358 Fasli (hereinafter called the Regulation) was passed and the petitioners were registered as retail dealers of petroleum products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g sales of motor spirit from March, 1957, to March, 1958, and they were required to submit returns within seven days, failing which best judgment assessments would be made under the relevant provision of the Regulation. The petitioners made representations against this order and their main case was that they had not collected any tax from consumers during this period and it would therefore be harsh to demand tax from them in the circumstances. Thereupon it is said that best judgment assessments were made against the petitioners and they were required to pay the tax, though liberty to pay in instalments was granted to them for this purpose. As however the petitioners failed to deposit the tax even in instalments, the registration certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spirit in the interest of the general revenues of the State. Section 2 of the Act is the definition section. Section 3 is the charging section and provides the rates at which the tax is to be levied on all retail sales of motor spirit. Section 4(1) which is being challenged is in these terms: "No person shall, after the commencement of this Act, carry on business in motor spirit as an importer or as a wholesale or retail dealer at any place in the State unless he has been registered as such under this Act." Sub-sections (2) and (3) make certain ancillary provisions and sub- section (4) is in these terms: "Registration may be made subject to such conditions, if any, as may be prescribed including in the case of an applicant for registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h intervals, as may be prescribed. Along with the return, under section 6 he is required to pay the amount of tax due in respect of the motor spirit sold by him in retail during the pre- ceding month according to the return. In order therefore that the State may have a check on the person from whom the tax is due section 4(1) provides for registration of dealers who carry on the business in motor spirit. Without such registration it would be impossible for the State to know the persons who are selling motor spirit and from whom the tax is due. The provision therefore under section 4(1) for registration of dealers is an eminently reasonable provision in order to carry out the object of the Act, namely, the levy and collection of this tax for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cellation is an un- reasonable restriction on the fundamental right to carry on business. There is no doubt that if a registration is cancelled under sub-section (6) it will not be possible for the person whose registration is so cancelled to carry on his business in motor spirit. Rule 14 provides conditions under which the registration may be cancelled and we are in the present case concerned with two of them, namely, where the holder of a registration certificate (a) fails to pay the tax or any other amount payable under the Act and (b) fraudulently evades the payment of the tax. The reasonableness of this provision as to cancellation of registration certificate has to be judged in the background of what we have already said about the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damental right guaranteed by Article 19(1)(g). We may in this connection refer to Narendra Kumar and Others v. The Union of India and Others [1960] 2 S.C.R. 375., where it was held that: "The word 'restriction' in Articles 19(5) and 19(6) of the Constitution includes cases of 'prohibition' also; that where a restriction reaches the stage of total restraint of rights special care has to be taken by the Court to see that the test of reasonableness is satisfied by considering the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to individual citizens by the proposed remedy, the beneficial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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