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J.V. Seshaiah and Sons and ors. Vs. the State of Andhra Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 1054 of 1966
Judge
Reported in[1971]28STC614(AP)
AppellantJ.V. Seshaiah and Sons and ors.
RespondentThe State of Andhra Pradesh and ors.
Appellant AdvocateV.S.L N. Rao, Adv.
Respondent AdvocateD.V. Sastry, Government Pleader
DispositionPetition allowed
Excerpt:
.....in the decorticator in quintals, time when expeller commenced working, dip reading in the unclean pit, dip reading in the clean pit, purpose of working of expeller, i. according to them to maintain the register like that it would take five hours more to produce the same quantity which will ordinarily be produced in eight hours. in the counter it was merely stated that the maintenance of the register like that will not cause any great hardship nor will it seriously interfere with the millers' business for the details to be recorded therein are only at the commencement and closing of the decorticator or the expeller and the mill need not be stopped for each hour. it appears to us clear that the enactment of the impugned rule 45-d will certainly result in the restriction of the business..........other than a decorticating miller, shall maintain a register in form xxvii showing the hour-to-hour working of the decorticator and expeller, the number of coolies employed for decortications and crushing, and the quantity of oil and cake obtained during the process. 2. the case of the petitioners is that the rule works great hardship on the oil-millers and seriously interferes with their business, that it is an unreasonable restriction on their right to carry on business and therefore violates their fundamental right to carry on business guaranteed to them under article 19(l)(g) of the constitution. they also complain that the oil-millers alone were singled out. for the purpose of maintaining hourly accounts and there is no reason why invidious discrimination should be made against.....
Judgment:

Ramachandra Raju, J.

1. The petitioners who are 33 in number are oil-millers in Kurnool District. The writ was filed against the State of Andhra Pradesh and the Commercial Tax Officers of Kurnool, Adoni and Nandyal. It was filed for the issue of a writ of mandamus or any other appropriate writ, direction or order directing the respondents to forbear from giving effect to G.O. Ms. No. 300, Revenue (S), dated 8th March, 1966, or to pass such other order or orders that this Court may deem fit and proper in the circumstances of the case. Under the G.O. referred to above the Government amended the Andhra Pradesh General Sales Tax Rules, 1957, by adding Rule 45-D to the said Rules. It is convenient 0to extract the impugned rule here:

45-D. Every miller of groundnuts, other than a decorticating miller, shall maintain a register in Form XXVII showing the hour-to-hour working of the decorticator and expeller, the number of coolies employed for decortications and crushing, and the quantity of oil and cake obtained during the process.

2. The case of the petitioners is that the rule works great hardship on the oil-millers and seriously interferes with their business, that it is an unreasonable restriction on their right to carry on business and therefore violates their fundamental right to carry on business guaranteed to them under Article 19(l)(g) of the Constitution. They also complain that the oil-millers alone were singled out. for the purpose of maintaining hourly accounts and there is no reason why invidious discrimination should be made against the business of groundnut oil-millers alone and why the rule was not made applicable to other businesses like textile, sugar etc. and there is no rational basis for classifying groundnut oil-millers into a separate category for imposing such unreasonable restriction on them ; therefore the impugned G. O. is also discriminatory and violative of Article 14 of the Constitution. The rule is further attacked on the ground that it is not within the rule-making power of the Government conferred under Section 39 of the A.P. General Sales Tax Act.

3. It was alleged in the affidavit that if as per the impugned Rule 45-D, the register in question is to be maintained showing hour-to-hour working of the decorticator and expeller, the decorticator and expeller have to be stopped each hour and then all weighments etc. have to be made, the forms filled up and the machines have to be started again. This frequent stoppage is bound not only to retard the yield but has adverse effect on the machinery as frequent stoppage and cleaning will shorten the life of the machinery. There will be considerable loss of time and labour. If the rule is to be given effect to, it will take five hours more to produce the same quantity which will ordinarily be produced in eight hours. The operations like that should not be interrupted each hour and such interruption impairs the efficiency and rate of production resulting ultimately in huge loss to the petitioners. According to them there are registers already maintained under the Central Excise Act and under the Andhra Pradesh General Sales Tax Act from which the oil and cake produced can easily be ascertained and there is absolutely no reason why fresh registers should be insisted upon.

4. Under Section 39 of the A.P. General Sales Tax Act, 1957, power was given to the State Government to make rules to carry out the purposes of the Act. The purposes of the Act are only levy and collection of taxes, namely, sales tax and purchase tax. The right to trade or to do business is a freedom guaranteed under the Constitution. That right can be restricted only when considered as reasonable in the interest of the general public. It is well recognised that when an enactment is found to infringe any of the fundamental rights guaranteed under Article 19(1) of the Constitution it must be held to be invalid unless those who support it can bring it under the protective provisions of Sub-clauses (5) and (6) of Article 19 and the; burden is on those who seek that protection and not on the citizens to show that the restrictive enactment is invalid.

5. In the form prescribed for the register under the impugned rule there are as many as 20 columns. There are columns like time when the decorticator commenced working, time when the decorticator stopped working, quantity of groundnuts used in the decorticator in quintals, time when expeller commenced working, dip reading in the unclean pit, dip reading in the clean pit, purpose of working of expeller, i.e., crushing of kernel into oil or crushing of cake into oil, time when the expeller stopped working, dip reading in unclean pit, dip reading in clean pit, quantity of kernel crushed (in quintals) during the time in columns 9 and 13, quantity of oil obtained from out of the kernel in column 16, quantity of oilcake obtained from out of the kernel in column 16, number of coolies employed in the working of the expeller and the number of coolies employed in the working of the decorticator. According to the petitioners for maintaining the register in this form to show hour-to-hour working will entail stoppage of the machines each hour and it is bound to retard the yield and efficiency and will have an adverse effect on the machinery shortening its life and there will be considerable loss of time and labour. According to them to maintain the register like that it would take five hours more to produce the same quantity which will ordinarily be produced in eight hours.

6. In the counter filed by the respondents these allegations have not been specifically controverted. In the counter it was merely stated that the maintenance of the register like that will not cause any great hardship nor will it seriously interfere with the millers' business for the details to be recorded therein are only at the commencement and closing of the decorticator or the expeller and the mill need not be stopped for each hour. As per the impugned rule the details of the working, namely, the quantities etc. are to be recorded every hour and not merely at the commencement and closing of the machines as stated in the counter filed by the respondents. In our opinion, prima facie the maintenance of the register showing hourly working as per the various columns in the form would work hardship to the oil-millers. In the counter the respondents have not made any attempt to show how the hourly maintenance of the register in the form prescribed will not cause any hardship or restriction to the oil-millers in their business. It appears to us clear that the enactment of the impugned Rule 45-D will certainly result in the restriction of the business of the oil-millers like the petitioners.

7. Therefore the further question to be considered is whether the restriction can be said to be reasonable and is in the interests of the general public. In the counter filed by the respondents it was not stated how the impugned rule works in the interests of the public and what is the object meant to be achieved by the said rule. As provided under Section 39 of the A.P. General Sales Tax Act, the State Government can make rules to carry out the purposes of the Act. It was not even spelled out in the counter how the rule is necessary to carry out the purposes of the Act. The chief objection of the petitioners seems to be not so much against the form in which register is to be maintained as it is against the provision contained in the rule that it should be maintained showing hour-to-hour working and making out the details required for all the 20 columns in the register every hour instead of giving these details at the end of each day. It has not been shown by the respondents how the hourly maintenance of the register will help more in the levy and collection of taxes than its maintenance at the end of each day. Mr. D. V. Sastry, the learned Government Pleader, has argued that the new rule was intended to prevent evasion of taxes. According to him if the register is to be maintained at the end of each day, there will be more scope for evasion by showing less quantities of oil and cake in the registers. We are unable to understand if the millers are able to show less quantities of oil and cake if it is at the end of each day, how they are prevented to do the same thing if they are forced to maintain the register showing the results of the hourly working. If it is a question of showing less quantities, instead of showing them less at the end of the day, they can also show less quantities even when giving them in the register at the end of each hour. It has not been satisfactorily shown how the impugned rule is necessary either to achieve the objects of the A.P. General Sales Tax Act or in any other way necessary in the interests of the general public.

8. In this connection the learned Government Pleader has relied on a Bench decision of this Court in N. Pullayya v. The Government of Andhra Pradesh [1968] 21 S.T.C. 291. In that case the learned Judges were considering the provisions of the A.P. General Sales Tax (Amendment) Act, 1963, in so far as they pertained to rice millers. One of those provisions is that a rice miller shall also maintain a register in form XV showing hour-to-hour working of the sheller and huller and the number of coolies employed for shelling and hulling. The amended provisions were impugned both on the ground of legislative competence and also on the ground that the provisions were unreasonable restrictions in carrying on business. The contention of the State in that case was that the amended provisions were made to prevent evasion of taxes which power is incidental and ancillary to the power to impose and levy tax on the sale or purchase of goods. This contention was accepted by the learned Judges and found that there is legislative competence in enacting the provisions. At the end of their judgment in a small paragraph they considered the objection of the petitioners with regard to unreasonable restrictions in carrying on business. Their Lordships disposed of that matter by observing thus :

We are not convinced that the maintenance of registers of the transactions by the miller imposes any restrictions on his carrying on the business.

9. We are not now concerned with the rice milling business. We do not have before us the various operations with regard to the processing of. rice. We do not also have before us the various columns of the register which they were asked to maintain. On the facts of this case we are satisfied that the new rule imposes excessive and arbitrary restrictions on the business of the petitioners and that the restriction does not in any way help either in the levy and collection of taxes or to check evasion of payment of taxes.

10. There remains to be considered only one ground, namely, the one based on Article 14 of the Constitution of India. We do not think the petitioners are strong on this ground. It cannot be said that the classification of oil-millers into one separate group is not founded on intelligible differentia which distinguishes them from other groups of businessmen.

11. As the petitioners have succeeded on the first two grounds the writ petition is to be allowed and the impugned rule is to be struck down as contravening Article 19(1)(g) of the Constitution of India and also on the ground that it is not within the rule-making power of the Government conferred under Section 39 of the A.P. General Sales Tax Act. Accordingly the petition is allowed and the impugned Rule 45-D is struck down as violative of Article 19(l)(g) of the Constitution and as also ultra vires of the rule-making power of the State Government. The petitioners are entitled to their costs. Advocate's fee Rs. 100.


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