The Check Post Officer & Ors Vs.
K. P. Abdulla Bros  INSC 239 (23 November 1970)
23/11/1970 SIKRI, S.M.
CITATION: 1971 AIR 792 1971 SCR (1) 817 1970
SCC (3) 355
RF 1977 SC2279 (27) R 1984 SC 981 (8)
Madras General Sales Tax Act, 1959-Section 42
sub-section (3)--Power to confiscate all goods and levy penalty in lieu at
check post--If ancillary or incidental to legislate, on taxes on the sale or
purchase of goods-Constitution of India, Seventh Schedule, List II, Entry
54-Interpretation of entries.
By sub-s. 3 of s. 42 of the Madras General
Sales Tax Act, 1959, the Officer-in-charge of a check-post or barrier has the
power to seize and confiscate any goods which are being carried in any vehicle
if they are not covered by the documents specified in the three sub-clauses.
On the question whether the power to
confiscate goods and to levy penalty in lieu of confiscation, when in respect
of the goods found in a vehicle the driver of the, vehicle is not carrying with
him the documents specified therein, is a provision which is ancillary or
incidental to them power to legislate in respect of taxes on the sale or
purchase of goods in entry 54 of List II of the Seventh Schedule to the
HELD : A taxing entry confers power upon the
legislature to legislate for matters ancillary or incidental, including
provisions for preventing evasion of tax. But the power conferred by
sub-section (3) to seize and confiscate and to levy penalty in respect of all
goods which are carried in a vehicle whether the goods are sold or not is not
incidental or ancillary to the power to levy sales tax. [819 H-820 B; 820 E]
Commissioner of Commercial Taxes & Ors., v. R. S. Jhevar & Ors., 
1 S.C.R. 148, held inapplicable.
United Provinces v. Mst. Atiqa Begum &
Ors.,  F.C.R. 110; Navinchandra Mafatlal v. Commissioner of Income-tax,
Bombay City,  1 S.C.R. 829 and Balaji v. Income-tax Officer, Special
Investigation Circle,  2 S.C.R. 983, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 2012 and 201 of 1969.
Appeals from the judgment and order dated
September 23, 1968 of the Madras High Court in Writ Appeals Nos. 106 and 107 of
A.K. Sen and A. V. Rangam, for the appellants
(in both the appeals).
T. A. Ramachandran, for the respondent (in
both the appeals), 10-L694SupCI/71 818 The Judgment of the Court was delivered
by Shah J. Motor Lorry No. K.L.R. 3919 driven along a highway from Coimbatore
in the State of Madras towards the border of the State of Kerala was when
searched by the Check Post Officer found to carry 85 bags of foodstuffs-45 bags
of maids, 20 bags of flour and 20 bags of Khandsari sugar. The driver of the
motor lorry was found to carry with him a bill of sale and a delivery note
which covered 85 bags of flour.
On the ground that without a bill of sale or
delivery note maid a and Khandsari sugar were attempted to be transported, and,
suspecting that there was an attempt at evasion of sales-tax, the Check Post
Officer by order dated March 2, 1965, confiscated the goods and gave an option
to M/s. K. P. Abdulla & Bros. the owners of the goods to pay Rs. 1,000'as
penalty in lieu of confiscation.
The owners of the goods then moved a petition
in the High Court of Madras challenging the validity of s. 42 (3) (a) of the
Madras General Sales Tax Act, 1959, and for an order quashing the penalty, and
another petition for a direction to the State of Madras and the Check Post
Officer to return the goods seized and "confiscated while in
Ramakrishnan, J., rejected the petitions. In
appeals filed by the owners, the petitions were allowed and the orders imposing
penalty and confiscation of goods were set aside.
The State of Madras has appealed to this
Court with certificate granted by the High Court.
Section 42 of the Madras General Sales Tax
Act, 1959, provides "(1) If the Government consider that with a view to
prevent or check evasion of tax under this Act in any place or places in the
State, it is necessary so to do, they may, by notification, direct the setting
up of a check post or the erection of a barrier or both, at such place or
places as may be notified.
"(2) At every check post or barrier
mentioned in sub-section (1), or at any other place when so required by any
officer empowered by the Government in this behalf, the driver or any other
person in charge of any vehicle or boat shall stop the vehicle or boat, as the
case may be, and keep it stationary as long as may reasonably be necessary, and
allow the officer in charge of the check post or barrier, or the officer
empowered as aforesaid, to examine the contents in the vehicle or boat and
inspect all records relating to the goods carried, which are in the possession
of such driver, or other person in charge, who shall, if so required, 819 give
his name and address and the name and address of the owner of the vehicle or
boat as well as those of the consignor and the consignee of the goods.
(3)The officer in charge of the check post or
barrier, or the officer empowered as aforesaid, shall have power to seize and
confiscate any goods which are under transport by any vehicle or boat and are
not covered by, (i) a bill of sale or delivery note, (ii)a Goods Vehicle
Record, a Trip Sheet or a Log, Book, as the case may be; and (iii)such other
documents as may be prescribed under section 43 and 44;
Provided that before ordering confiscation
the officer shall give the person affected an opportunity of being heard and
make an inquiry in the prescribed manner;
Provided further that the officer ordering
the confiscation shall give the person affected option to pay in lieu of confiscation(a)in
cases where the goods are taxable under this Act, in addition to the, tax
recoverable, a sum of money not exceeding one thousand rupees, or double the
amount of tax recoverable, whichever is greater; and (b)in other cases, a sum
of money not exceeding one thousand rupees." By sub-s. (2) the driver or
any person in charge of the vehicle is required to stop the, vehicle and to
allow the officer in charge of the check post or barrier to examine the
contents in the vehicle, and to inspect all records relating to the goods
carried in the vehicle. The officer in charge of the check post or barrier is
invested with power by sub-s. (3) to seize and confiscate any goods which are
carried and are not covered by the documents specified therein. The officer is
required when ordering confiscation to give the person affected option to pay
penalty in lieu of confiscation.
Entry 54 of List II of the Seventh Schedule
to the Constitution authorises the State Legislature to legislate in respect of
taxes on the sale or purchase of goods. A legislative entry does not merely
enunciate powers : it specifies a field of legislation and the widest import
and significance should be attached to it. Power to legislate on a specified
topic includes power to legislate in respect of 820 matters which may fairly
and reasonably be said to be comprehended therein: see The United Provinces v.
Mst. Atiqa Begum and Others(1); Navinchandra Mafatlal v. The Commissioner of
Income-tax, Bombay City(2); and Balaji v. Income-tax Officer, Special
Investigation Circle(3)., A taxing entry therefore confers power upon the
Legislature to legislate for matters ancillary or incidental including
provisions for preventing evasion of tax. Subsections (1) & (2) of S. 42
are intended to set up machinery for preventing evasion of. sales tax. But, in
our judgment, the power to confiscate goods carried in a vehicle cannot be said
to be fairly and reasonably comprehended in the power to legislate in respect
of taxes on sale or purchase of goods. By sub-s. (3) the officer in charge of
the check post or barrier has the power to seize and confiscate any goods which
are being carried in any vehicle if they are not covered by the documents
specified in the three sub clauses. Sub-section (3) assumes that all goods
carried in a vehicle near a check post are goods which have been sold within
the State of Madras and in respect of which liability to pay sales tax has
arisen, and authorises the check post officer, unless the specified documents
are produced at the check post or the barrier, to seize and confiscate the
goods and to give an option to the person affected to pay penalty in lieu of
confiscation. provision so enacted on the assumption that goods carried in a
vehicle from one State to another must be presumed to be transported after sale
within the State is unwarranted. In any event power conferred by sub-s. (3) to seize
and confiscate add to levy penalty in respect of all goods which are carried in
a vehicle whether the goods are sold or not is not incidental or ancillary to
the power to levy sales tax. A person carrying his own goods even as personal
luggage from one State to another or for consumption, because he is unable to
produce the documents specified in clauses (i), (ii) & (iii) of sub-s. (3)
of s. 42, stands in danger of having his goods forfeited. Power under
sub-section (3) of S. 42 cannot be said to be ancillary or incidental to the
power to legislate for levy of sales tax.
The High Court was of the view that the
question which fell to be determined was concluded by the judgment of this
Court in The Commissioner of Commercial Taxes and Others v. R. S. Jhaver and
Others,(4). That case arose under s. 41(2) of the Madras General Sales Tax Act
1 of 1959, and this Court struck down the power conferred under the Madras
General Sales Tax Act, 1959, upon the officer of the Government to seize such
accounts, registers, records or other documents of the dealer as he may
consider necessary, if he had reason to suspect that any dealer is attempted to
evade payment of any tax, fee or other (1)  F.C.R. 110 (2)  1
S.C.R. 829 (3)  2 S.C.R. 983 (4)  1 S.C.R. 148 821 amount. This
Court held that tax and penalty cannot be levied before the first sale in the
State, and on that account authority conferred to levy tax and penalty before
the sale and to confiscate the goods for non-payment was outside the
legislative competence of the State That case may have no direct bearing in
In the present case, however, the power to
confiscate the goods and to levy penalty in lieu of confiscation, when in
respect of the goods found in a vehicle the driver of the vehicle is not
carrying with him the documents specified therein, is not a provision which is
ancillary or incidental to the power to tax sale of goods.
The appeals therefore fail and are dismissed
One hearing fee.
Y.P. Appeals dismissed.