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 1968
AK Sen and A V Rangam for the appellants in both the appeals
T A Ramachandran for the respondent in both the appeals 10 L694SupCI71 818 The Judgment of the Court was delivered by Shah J
Motor Lorry No KLR 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 Ms K P Abdulla  Bros the owners of the goods to pay Rs 1000 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 section 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 transit
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
3The 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 iia Goods Vehicle Record a Trip Sheet or a Log Book as the case may be and iiisuch 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 ain 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 bin other cases a sum of money not exceeding one thousand rupees
 By sub section
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 section
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 vs Mst
Atiqa Begum and Others1 Navinchandra Mafatlal vs The Commissioner of Income tax Bombay City2 and Balaji vs Income tax Officer Special Investigation Circle3
 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 section 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 section
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 subclauses
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 section
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 section
3 of section 42 stands in danger of having his goods forfeited
Power under sub section 3 of section 42 cannot be said to be ancil lary 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 vs R section Jhaver and Others4
That case arose under section 412 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 2 1955 1 SCR 829 3  4  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 this case
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 with costs
One hearing fee
YP Appeals dismissed


Summary:
By sub section 3 of section 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 Constitution 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 vs R section Jhevar  Ors   held inapplicable
United Provinces vs Mst
Atiqa Begum  Ors 1940 FCR 110 Navinchandra Mafatlal vs Commissioner of Income tax Bombay City 1955 1 SCR 829 and Balaji vs Income tax Officer Special Investigation Circle   referred to