DUNLOP Vs. STATE OF KERALA

JUDGEMENT

(1.) Common prayer in all these original petitions filed under Art.226 of the Constitution of India is to declare S.29A(2B) of the Kerala General Sales Tax Act and Ext. P2 circular issued by Board of Revenue, ultra vires, unconstitutional, inoperative and invalid. In some of the original petitions, S.29A(2A) is also under challenge.

(2.) S.29A provides for the procedure for inspection of goods in transit through notified areas or any other place found necessary. Sub-s.(2) authorises the checking officer to detain the goods and permit it to be transported only on furnishing security, provided that he has reason to suspect (i) that the goods under transport are not covered by proper and genuine documents in cases where such documents are necessary; or (ii) that there was attempt to evade tax. Proviso permits him, in appropriate cases, to release the goods on execution of bonds, in cases covered by Sub-s.(2) if it is found that there is collusion for the purpose of evading tax. Sub-s(2A) authorises detention of vehicle also. Sub-s.(2B) contemplates three contingencies. They are concerning reasonable belief on the facts, (i) that tax payable for the sale or purchase of goods under transport is not paid; or (ii) that the dealer, whose goods are transported, has not paid any tax in accordance with the procedure prescribed; or (iii) that he has, at any time, defaulted payment of tax for any period. In such cases, officer can prevent the goods and he need allow the goods to be transported only after realising the tax due on the turnover of the goods transported. In case of refusal, goods shall be detained and dealt with as if it was an attempt to evade tax. Relevant portions of Ext. P2 contain executive directions to effectuate the above said provisions.

(3.) S.5 of the Kerala General Sales Tax Act (the Act for brevity) contains the charging provision, which provides for levy of tax on sale or purchase of goods. S.7(2) contains provision for permission on application to pay tax in advance on monthly or other prescribed instalments and for that purpose to submit returns also. There are also other provisions like R.10, 11 and 21 for submission of returns and payment of tax. Under R.33(17), every wholesale dealer, while delivering goods to a retail dealer in pursuance of a sale, where no sale bill is issued, or every person who consigns goods by any vehicle or vessel or any other means in pursuance of a sale, where a sale bill is not issued, or consigns goods through the said means from one godown to another or from one of his shops to another for the purpose of storage or sale, shall issue a delivery note in Form No.26. S.16 and 17 provide for final assessment and S.23 provides for payment and recovery of tax. R.18 prescribes for annual return and final assessment. These are said to be the only modes of assessment and collection contemplated under the Statute.