T.S. Krishnamoorthy Iyer, J.
1. The sole question in the appeal relates to the validity of Section 14(4) read with Section 46(2)(e) of the Kerala General Sales Tax Act, 1963.
2. The appellant is a registered dealer under the Kerala General Sales Tax Act, 1963. After issuing notice and hearing his objections the appellant was called upon by the Sales Tax Officer, Badagara, by exhibit P3 order dated 26th September, 1970, to furnish security for Rs. 27,600 under Section 14(4) of the Kerala General Sales Tax Act, 1963, read with Rule 6, Sub-rule (1), of the Kerala General Sales Tax Rules, 1963. Since the appellant did not comply with exhibit P3, the Sales Tax Officer issued exhibit P4 notice informing him that prosecution under Section 46(2)(e) of the Kerala General Sales Tax Act, 1963, will be launched against him.
3. The appellant, therefore, filed the petition under Article 226 of the Constitution to quash exhibits P3 and P4 on the ground that Sections 14(4) and 46(2)(e) of the Kerala General Sales Tax Act, 1963, and Rule 6 of the Kerala General Sales Tax Rules are violative of articles 14, 19(1)(g) and 301 of the Constitution. A learned single Judge dismissed the petition and his decision is challenged in the writ appeal.
4. Section 13 of the Kerala General Sales Tax Act, 1963, deals with the registration of dealers and Section 14 thereof prescribes the procedure for registration. Section 14(4) of the Act reads :
The prescribed authority shall have power for good and sufficient reasons to demand from any dealer, who has been registered or has applied for renewal of registration, security for the proper payment of tax by him for an amount not exceeding one-half of the tax payable on the turnover of the dealer for the year as estimated by the prescribed authority or three months' compounded rate in the case of applicants who have opted to pay tax under Section 7 :
Provided that the assessing authority shall have power to demand at any time additional security if such authority has reason to believe that the turnover estimated under this sub-section was too low.
Section 46(2)(e) of the Kerala General Sales Tax Act, 1963, reads:
46. Penalty for submitting untrue return, etc.-
(2) Any person who...
(e) carries on business as a dealer without furnishing the security demanded under Sub-section (4) of Section 14, shall, on conviction by a Magistrate not below the rank of a Magistrate of the First Class, be liable to simple imprisonment which may extend to six months or to fine not less than the tax or other amounts due but not exceeding two thousand rupees, or to both.
Rule 6, Sub-rule (1), of the Kerala General Sales Tax Rules, 1963, reads :
6. Security to be furnished by certain dealers.-(1) Where the assessing authority is of the opinion that a dealer who has been registered or has applied for renewal of registration should furnish security or additional security for the proper payment of the tax payable by him, the said authority may direct him in writing to furnish within such time as may be fixed by the said authority security for an amount not exceeding one-half of the tax payable on the turnover of the dealer for the year as estimated by it or three months' compounded amount in the case of dealers who have opted to pay tax under Section 7. In making such estimate the said authority shall take into account the taxable turnover of the dealer, if any, during the preceding year, the trend of business at the time the estimate is made, the nature of the goods dealt in by him and such other factors as may, in the opinion of the said authority, assist it in making a proper estimate.
Sub-rule (2) of Rule 6 prescribes the nature of the security to be furnished and Sub-rule (3) of Rule 6 provides that the security furnished shall be maintained in full so long as the registration certificate continues to be in force and may in the event of default of payment of any tax be liable to adjustment towards such tax after due intimation.
5. Counsel for the appellant did not contend that Section 14(4) of the Kerala General Sales Tax Act, 1963, by itself will offend article 19(1)(g) or 301 of the Constitution. His submission was that because of the penal consequences under Section 46(2)(e) of the Act for non-compliance of Section 14(4), articles 19(1)(g) and 301 of the Constitution are violated as by imprisonment the dealer is effectively prevented from carrying on his profession.
6. The plea that Section 14(4) read with Section 46(2)(e) of the Kerala General Sales Tax Act, 1963, offends Article 19(1)(g) of the Constitution has to be overruled in view of the decision of the Supreme Court in Nand Lal Raj Kishan v. Commissioner of Sales Tax  12 S.T.C. 324 (S.C.). The Supreme Court had to examine whether Section 8A of the Bengal Finance (Sales Tax) Act, 1941, which was in force in Delhi offended Article 19(1)(g) of the Constitution. The said provision reads :
The Commissioner, if it appears to him to be necessary so to do for the proper realisation of the tax levied under this Act, may impose for reasons to be recorded in writing as a condition of the issue of a registration certificate to a dealer or of the continuance, in effect, of such a certificate issued to any dealer, a requirement that the dealer shall give security up to an amount and in the manner approved by the Commissioner for the payment of the tax for which he may be or become liable under this Act.
After approving the decision of the Calcutta High Court in Durga Prosad Khaitan v. Commercial Tax Officer and Ors.  8 S.T.C. 105 their Lordships of the Supreme Court observed :.the power to levy a tax includes the power to impose reasonable safeguards in collecting it, and demanding security for the proper payment of the tax payable under the Act is neither an arbitrary nor an unreasonable restriction.
In Durga Prosad Khaitan v. Commercial Tax Officer and Ors.  8 S.T.C. 105 the Calcutta High Court had to consider the vires of Section 7(4a)(i) of the Bengal Finance (Sales Tax) Act, 1941, which gave power to the Commissioner to demand reasonable security for the proper payment of tax payable under the Sales Tax Act. The learned single Judge said:.I hold that Section 7(4a)(i) of the Act does not confer unfettered and arbitrary power upon the Commissioner and that the restrictions imposed by it are reasonable restrictions and do not contravene the provisions of Article 19(1)(g) of the Constitution. It is not ultra vires. After all, the Legislature has the power of imposing taxation and it is no good saying that the taxation is oppressive. That is not a matter which concerns the court: 5. Anantha Krishnan v. State of Madras A.I.R. 1952 Mad. 395. The power to levy a tax would include the power to impose reasonable safeguards in collecting it.
We, therefore, overrule the contention and hold that Section 14(4) read with Section 46(2)(e) of the Kerala General Sales Tax Act, 1963, does not offend Article 19(1)(g) of the Constitution.
7. We shall now examine whether Section 14(4) read with Section 46(2)(e) of the Kerala General Sales Tax Act, 1963, is violative of Article 301 of the Constitution. To interpret Article 301 of the Constitution, counsel for the appellant relied on Section 92 of the Australian Constitution Act and the decisions based thereon especially Commonwealth of Australia v. Bank of New South Wales  A.C. 235. In view of the recent pronouncements of the Supreme Court, we think it unnecessary to examine the decisions based on Section 92 of the Australian Constitution Act.
8. In Atidbari Tea Co. Ltd. v. State of Assam A.I.R. 1961 S.C. 232 at p. 254 Gajendragadkar, J., speaking for the majority pointed out that 'in determining the limits of the width and amplitude of the freedom guaranteed by Article 301 a rational and workable test to apply would be : Does the impugned restriction operate directly or immediately on trade or its movement ?' and observed thus at page 254:
Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by Article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. The argument that all taxes should be governed by Article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld.
This interpretation of Article 301 was not dissented from in the Automobile case A.I.R. 1962 S.C. 1406 at p. 1424. Following these decisions, the Supreme Court held in Andhra Sugars Ltd. v. State of A.P. A.I.R. 1968 S.C. 599 that any non-discriminatory tax on goods does not offend Article 301 unless it directly impedes the free movement or transport of the goods. This principle has again been followed by the Supreme Court in State of Madras v. Nataraja Mudaliar  22 S.T.C. 376 (S.C). Shah, J., speaking for the majority said :
This article (article 301) is couched in terms of the widest amplitude : trade, commerce and intercourse are thereby declared free and unhampered throughout the territory of India. The freedom of trade so declared is against the imposition of barriers or obstructions within the State as well as inter-State : all restrictions which directly and immediately affect the movement of trade are declared by Article 301 to be ineffective. The extent to which Article 301 operates to make trade and commerce free has been considered by this court in several cases.
The levy of sales tax is for the raising of the general revenue of the State which is in the interests of the public. Section 14(4) is only a regulatory measure to ensure proper payment of sales tax. Probably that was the reason why counsel for the appellant did not contend that Section 14(4) by itself is violative of Article 301 of the Constitution. His submission was in view of the nature of the penalty imposed by Section 46(2)(e) of the Act, the provision is violative of Article 301 of the Constitution. We cannot agree. There is no use of a provision calling upon a dealer to give security for prompt payment of tax unless there is legal sanction to visit the dealer with penal consequences if he fails to furnish security. Otherwise, the provision for the furnishing of security will be rendered ineffective.
9. The fact that the particular penalty prescribed by the legislation prevents a dealer from carrying on his trade or profession will not make it a non-regulatory measure.
10. There is also no substance in the plea that the provision is violative of Article 14 of the Constitution. An order under Section 14(4) can be passed only for good and sufficient reasons which have been highlighted in Rule 6 of the Rules. The order in question can also be revised at the instance of the dealer by the Deputy Commissioner under Section 36 or by the Board of Revenue under Section 38 of the Act.
11. We are, therefore, of the view that the appeal is without substance and we dismiss the same. We make no order as to costs.