Ancillary taxation power upheld for seizure and confiscation of goods in transit where tax liability had already attached.

Section 42(3)(a) of the Madras General Sales Tax Act was upheld as a valid anti-evasion measure because the taxable event had already occurred and the tax liability had become exigible. The Court distinguished the invalidated power under section 41(4), noting that the challenged seizure and confiscation power operated in a situation where the goods had been sold and were being transported across the State border. On that basis, seizure, confiscation and penalty in lieu of confiscation were treated as ancillary to the power of taxation, and the writ petitions seeking quashing of the penalty order and redelivery of the goods failed.

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Issues: Whether the power of seizure, confiscation and levy of penalty in lieu of confiscation under section 42(3)(a) of the Madras General Sales Tax Act, 1959 was ultra vires, and whether the writ petitions for quashing the penalty order and for redelivery of the goods could succeed.

Analysis: The power under section 42 was distinguished from the invalidated power considered under section 41(4). On the facts, the goods had already been sold and were in course of transport across the State border, so the taxable event had been completed and tax had become exigible. The confiscatory power was therefore capable of operating as a measure to prevent evasion in a situation where the tax liability had attached, and the narrow infirmity that persuaded the Supreme Court to strike down section 41(4) was absent. The Court held that, in the circumstances, seizure and confiscation could be treated as ancillary to the power to levy tax.

Conclusion: The challenge to section 42(3)(a) failed, and the writ petitions were dismissed.

Final Conclusion: The confiscation and penalty order was upheld, and the petitioner obtained no relief in the writ proceedings.

Ratio Decidendi: Where the taxable event has already occurred and tax has become exigible, a statutory power to seize and confiscate goods in transit may be upheld as ancillary to the power of taxation and as a reasonable anti-evasion measure.

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