Reasonable business regulation in tax law failed where hourly register maintenance was excessive and beyond rule-making power.

A regulatory requirement compelling groundnut oil-millers to maintain an hour-to-hour register was held to impose an excessive and arbitrary burden on business, because it would disrupt operations, waste time and labour, and was not shown to meaningfully assist tax levy, collection, or prevention of evasion; it was therefore violative of article 19(1)(g). The Court also held that the requirement was not necessary to carry out the purposes of the Andhra Pradesh General Sales Tax Act and had gone beyond the limited rule-making power under section 39, so it was ultra vires. The impugned rule was struck down.

---

---

Issues: (i) Whether rule 45-D of the Andhra Pradesh General Sales Tax Rules, 1957, requiring groundnut oil-millers to maintain an hour-to-hour register, imposed an unreasonable restriction on the right to carry on business under article 19(1)(g) of the Constitution of India; (ii) whether the impugned rule was within the rule-making power conferred by section 39 of the Andhra Pradesh General Sales Tax Act, 1957.

Issue (i): Whether rule 45-D of the Andhra Pradesh General Sales Tax Rules, 1957, requiring groundnut oil-millers to maintain an hour-to-hour register, imposed an unreasonable restriction on the right to carry on business under article 19(1)(g) of the Constitution of India.

Analysis: The rule required detailed hourly entries covering the working of the decorticator and expeller, quantities processed, oil and cake obtained, and labour employed. On the facts placed before it, the Court found that such a requirement would interrupt operations, cause loss of time and labour, and adversely affect efficiency and machinery life. The respondents did not show how hourly maintenance of the register furthered levy, collection, or prevention of tax evasion in any meaningful way.

Conclusion: The restriction was held to be excessive and arbitrary and therefore violative of article 19(1)(g) of the Constitution of India.

Issue (ii): Whether the impugned rule was within the rule-making power conferred by section 39 of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The rule-making power under section 39 was limited to rules carrying out the purposes of the Act. The Court held that it was not shown that insisting on hourly maintenance of the register was necessary to carry out the purposes of the Act or to aid tax administration. The rule therefore travelled beyond the statutory power conferred on the Government.

Conclusion: The rule was held to be ultra vires the rule-making power under section 39 of the Andhra Pradesh General Sales Tax Act, 1957.

Final Conclusion: The writ petition succeeded on the constitutional and statutory challenges, and the impugned rule was struck down.

Ratio Decidendi: A regulatory requirement imposed under tax legislation must bear a real and reasonable relation to the Act's purposes and cannot, without sufficient justification, impose excessive restrictions on the freedom to carry on business.

---