BALIA, J. - (1.) IN these writ petitions, since common questions of law are involved and, therefore, we deem it proper to decide them by a common order.
(2.) BY these writ petitions, the petitioners have challenged the constitutional validity of Section 78(5) of the Rajasthan Sales Tax Act, 1994 (for short `the Act'). It is relevant to mention here that except writ petitions No. 2541 of 1999 and 1103 of 2000, all the five writ petitions were initially filed as Original Applications before the Rajasthan Taxation Tribunal, Jodhpur and on its abolition, they have been transferred to this Court. In all these writ petitions, while the goods were in transit with the Transporters, the goods were checked in exercise of the powers conferred under S. 78 of the Act and on finding that either documents required under sub-S. (2) of S. 78 of the Act were not being carried alongwith the goods or there was some deficiency in the particulars of the documents or some of the documents were not being accompanying the goods, notices for levying penalty under S. 78(5) of the Act were issued. S. 78(5) of the Act specifically provides that the Incharge of the check-post or the Officer empowered under sub-S. (3) after having given the person incharge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods, whether seized or not, in violation of the provisions of clause (a) of sub-S. (2) or for submission of false or forged documents or declaration, a penalty equal to thirty per cent of the value of such goods. It has been contended by the learned counsel appearing for the petitioners that provisions of S. 78(5) of the Act are ultra vires because they are beyond the scope of Entry 54 of List II of Schedule VII appended to the Constitution. Entry 54 authorises the State Govt. to levy tax on sale or purchase of goods. A carrier or transporter who carries on goods sold by the dealer is not in any sense reasonable and proximately connected with the sale that may occasion the liability to pay sales tax and, therefore, to make any provision fastening any obligation on such transporter who is not connected with the sale or purchase of the goods in any manner which are carried by him neither falls under provision for levying of tax nor can be termed as ancillary or incidental matter, for which the State may legislate under the said entry. The other contention is founded on the ground of reasonableness. It is contended that levy of penalty u/s. 78(5) on person in charge of goods linked with value of goods at the rate of 30% of the goods is unreasonable because (i). Requiring transporter of goods, in all conditions which may or may not be connected with sale or purchase of goods to statute obligation u/s. 78(5) itself amounts to unreasonable restriction or freedom of trade under Art. 19(1)(g) of the constitution. (ii) The restriction referred to above impede free movement of goods affecting free trade commerce and intercourse through out the territory of India contrary to Art. 301 and 303 of the Constitution which does not amount to reasonable restriction on freedom of trade within the meaning of Art. 304(b) of the Constitution and lastly (iii) the penalty at the rate of 30% of the value of goods, in breach of obligation cast on person incharge of goods in transit itself is unreasonable, as the amount of penalty has no reasonable nexus with the nature of obligation imposed and the purpose for which such obligation has been imposed, who are not ordinarily connected with the taxable event. It has been urged by the learned counsel for the petitioners that even if the legislature is competent to legislate such a provision, the provisions of S. 78 (5) of the Act suffer from the vice of unreasonableness inasmuch as a penalty equal to thirty percent of the value of such goods cannot be said to be reasonable, fair and proportionate one. The obligation cast under S. 78 of the Act can at best be considered as an ancillary and incidental provision for eliciting the requisite informations for levy of tax and as such, it impinges upon the test of reasonableness under Art. 14 of the Constitution of India and amounts to unreasonable restriction on freedom of trade under Art. 19(1)(g) of the Constitution and Secs. 301 and 304(b) of the Constitution. Learned counsel placed reliance on State of Haryana and Ors. vs. Santlal and another (1). Mr. S.M. Mehta, the learned Advocate General urged that entries contained in the Lists appended to Schedule VII of the Constitution only provide for the topics for which the respective legislatures may legislate the law. He has contended that widest amplitude should be given to the language of the entries and each general word and the area of legislation should be held to extend to all ancillary or subsidiary matters, which can reasonably and fairly be said to be comprehended and which makes the law effected. It was pointed out by Mr. Mehta that the language of the impunged provision itself suggests that to check and prevent avoidance or evasion of tax, this provision has been enacted. He has submitted that power to levy tax inheres into the power to make a provision for preventing or checking the avoidance or evasion of tax, which may be resorted by a tax payer. Eliciting requisite informations from the person in possession of the goods about the consignor and the consignee are only required to efrectuate the levy of sales tax under the Act, which may be said to be avoided or evaded by surreptitious dealings in fictituous names or transporting goods clandestinely. Therefore, the legislation providing for securing requisite informations from the Driver or the person Incharge of the vehicle or carrier of goods in movement is a matter ancillary and incidental to the levy of tax on sale of such goods and thus, it must be held to be within the competence of the State Legislation.
(3.) HE has further urged that once it is established that the provision of the Statute is within the statutory competence of the State legislature, an obligation has been cast on certain persons to divulge information or carry documents in relation to goods in movement, on failure to do so, providing consequences for such a failure necessarily follows within the scope of the said legislation. The quantum of penalty prescribed for any alleged breach of the provision of the Statute which is within the legislative competence of the State being matter of policy cannot be examined by the Court by way of judicial review. Learned Advocate General placed reliance on Sodhi Transport vs. State of U.P. (2), State of M.P. vs. Bharat Heavy Electricals (3), and Tripura Goods Transport Association vs. Commissioner of Taxes (4). Contours of considering challenge to any legislation are well settled. A law can be declared to be ultra vires if (i) it is beyond the legislative competence of legislature or its delegate under Art. 246 of the Constitution viz. it is beyond the subject matter on which the concerned legislative authority can legislate (ii) if it infringe any fundamental right guaranteed under Pt. III of Constitution, Taxing statutes too are not immune from this text, though more laxity is permitted to the legislature in considering its effect vis a vis fundamental rights. (iii) it contravenes any other mandatory provision of the Constitution which impose restrictions on the powers of a legislature e.g. Art. 301 and 303 and 304 of the Constitution, restricts legislative authority impeding the free trade, commerce and interaction throughout the territory of India. ;