MOOL CHAND CHUNI LAL Vs. MANMOHAN SINGH

JUDGEMENT

(1.) THESE three writ petitions (C. W. P. No. 4154 of 1976 and C. W. P. Nos. 506 and 507 of 1977) raise the question of the vires of sub--sections (7) and (8) of S. 14-B of the Punjab General Sales Tax Act, 1948 as amended by Punjab Act No. 9 of 1974. It was contended by Shri Bhagirath Das Seth, learned counsel for the petitioners, that sub--ss. (7) and (8) of Section 14-B were beyond the competence of the State Legislature as they did not fall within the ambit of Entry 54 of List II of Schedule VII of the Constitution.

(2.) SECTION 14--B (1) enables the State Government to establish check posts or erect barriers, with a view to prevent or check the evasion of tax under the Act. Sub--SS. (2), (3), (4) and (5) of S. 14-B provide for the documents which should accompany the goods carried in a goods vehicle, for the examination by the officer incharge of the check post or barrier of the documents, packages etc. , for declarations to be made by the owner or person incharge of the goods vehicle and for production for examination all transport and other documents at stations of transport of goods, bus stands etc. We are not particularly concerned with Sub--Ss. (2), (3), (4) and (5) of S. 14--B. Sub--Ss. (6), (7) and (8) are material. Sub-Ss. (6), (7) and (8) as they stand now were introduced by the amending Act No. 9 of 1974. Originally sub--ss. (6), (7) and (8) were as follows:-

(3.) IT will be noticed at once that S. 14--B (6), as it stood originally, provided for the seizure of any goods not covered by documents and S. 14--B (8) provided for the seizure of all goods in respect of which the declaration was false. The seizure might be made irrespective of the question whether there was any attempt to evade tax. The basic but unwarranted assumption underlying both the provisions for seizure, as in the case before the Supreme Court, was that the goods were transported after sale within the State. Again, as in the case before the Supreme Court, no attempt was made to specify what goods might be sized. The provisions were considered by Bal Raj Tuli J. and the Division Bench to fall within the principles laid down in K. P. Abdulla's case (1971 Tax LR 4) (SC) (supra ). But the position is quite different now. The new provision for the levy of penalty (amended S. 14--B (7)) is 'no longer based on any assumption that the goods were transported after sale within the State'. Its present basis is the attempt to evade tax and it prescribes a condition precedent to the levy of penalty. The condition precedent is that the authorised officer should record a finding that there has been an attempt to evade the tax due under the Act. It cannot possibly be disputed that the prevention of evasion of sales--tax is a power incidental or ancillary to the levy of sales--tax and falls within Entry 54 of List II of Schedule VII of the Constitution. S. 14--B (7), which provides for detention of goods and levy of penalty if there has been an attempt to evade the tax due under the Act, cannot, therefore, be held to be without constitutional sanction. It is further to be noticed that the goods which are to be detained are also specified in S. 14-B (6) as goods meant for trade and not covered by proper and genuine documents.