Check-post confiscation powers were struck down for burdening trade and imposing disproportionate restrictions without adequate safeguards.

Check-post, detention, confiscation and security provisions under the Kerala General Sales Tax Act were treated as more than mere regulatory controls because they directly burdened the movement of goods. The Court found them inconsistent with the freedom of trade under Article 301 and not saved by Article 304(b) in the absence of the required sanction. It also held that the confiscation and penalty machinery imposed disproportionate and unreasonable restrictions on property and trade rights under Articles 19(1)(f) and 19(1)(g), given the harsh consequences and inadequate safeguards. The rule's possible overreach beyond the Act was noted, but no final ruling was needed on that point.

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Issues: (i) Whether the impugned check-post, detention, confiscation, and security provisions under the Kerala General Sales Tax Act, 1963 and the Rules framed thereunder violated the freedom of trade guaranteed by Article 301 of the Constitution of India and were saved by Article 304(b); (ii) Whether the confiscation and penalty provisions imposed unreasonable restrictions on the rights protected by Article 19(1)(f) and Article 19(1)(g) of the Constitution of India; (iii) Whether rule 35(5) of the Rules framed under the Kerala General Sales Tax Act, 1963 travelled beyond section 29 of the Act.

Issue (i): Whether the impugned check-post, detention, confiscation, and security provisions under the Kerala General Sales Tax Act, 1963 and the Rules framed thereunder violated the freedom of trade guaranteed by Article 301 of the Constitution of India and were saved by Article 304(b).

Analysis: Provisions that merely regulate the movement of goods do not offend Article 301, but provisions that directly and immediately burden or hamper the free flow of trade do. The impugned scheme required carriage of specified documents, empowered officers to stop and detain vehicles, and authorised confiscation where the documents were absent or suspected to be false. The Court held that these features were not merely regulatory but operated as restrictions on transport itself. The absence of Presidential sanction under Article 304(b) therefore became material, and the provisions could not be sustained on the footing of a permissible regulatory measure.

Conclusion: The impugned provisions were held to violate Article 301 and were not saved by Article 304(b), against the respondents and in favour of the petitioner.

Issue (ii): Whether the confiscation and penalty provisions imposed unreasonable restrictions on the rights protected by Article 19(1)(f) and Article 19(1)(g) of the Constitution of India.

Analysis: The Court treated the right to hold property and carry on trade as subject only to reasonable restrictions in the public interest. It found the confiscation machinery harsh, the safeguards inadequate, and the opportunity of hearing and verification too uncertain in practical operation. The possibility of repeated detention, the exposure of goods to public auction, and the limited protection afforded by the security option were held to make the restrictions disproportionate to the object of preventing sales tax evasion.

Conclusion: The provisions in section 29(4) and (5) and rule 35(5) to (12) and (15) were held to impose unreasonable restrictions and were unconstitutional, in favour of the petitioner.

Issue (iii): Whether rule 35(5) of the Rules framed under the Kerala General Sales Tax Act, 1963 travelled beyond section 29 of the Act.

Analysis: Rule 35(5) extended suspicion to documents beyond the declaration specifically mentioned in section 29(2)(b), and the challenge that it enlarged the statutory power was found to have force. However, because the section and the rule were already being struck down on other constitutional grounds, no final pronouncement on this point was considered necessary.

Conclusion: The Court did not finally decide the ultra vires challenge on this ground, though it indicated that the objection was not without substance.

Final Conclusion: The statutory scheme for check-post control and confiscation was invalidated, the connected writ petitions were allowed, and the impugned proceedings were set aside with consequential reliefs.

Ratio Decidendi: A statutory scheme that directly and immediately burdens the movement of goods through confiscatory check-post powers, without adequate safeguards, is not a mere regulatory measure and cannot survive scrutiny under Articles 301 and 19(1)(f) and 19(1)(g).

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