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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the power under section 14-B(8) of the Punjab General Sales Tax Act, 1948 to seize goods and compel payment before release was within the legislative competence of the State and valid as an incident of the power to levy sales tax.
Analysis: The provision was treated as pari materia with the corresponding Madras provision that had already been struck down. The governing principle applied was that the power to tax sales or purchases does not fairly and reasonably include a power to seize and effectively confiscate goods in transit on the assumption that they must have been sold within the State. A measure authorising seizure and release only on payment of money in respect of all transported goods, whether sold or not, was held not to be incidental or ancillary to the power to levy sales tax under entry 54 of List II.
Conclusion: The challenge to section 14-B(8) failed; the provision was treated as invalid for the same reason as the corresponding Madras provision, and the appeal was dismissed.
Final Conclusion: The impugned seizure-and-payment mechanism was held to be beyond the State's sales tax legislative power, and the departmental action was not sustained.
Ratio Decidendi: A statutory power under a sales tax entry cannot extend to seizure and conditional release of goods in transit where such a measure is neither incidental nor ancillary to the levy of sales tax.
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