Permit-like import controls on cement under delegated tax rules were treated as ultra vires and discriminatory.

Rule 62-A and forms 45-B and 45-C under the Gujarat Sales Tax Act were held to go beyond the limited power in section 59-A(3)(a) because they did not merely require carrying documents for check-post inspection but imposed importer-specific declarations and preconditions amounting to a permit-like regime. The provisions were also described as creating a direct fetter on inter-State movement of cement and as an unreasonable restriction on trade under articles 301, 304(b) and 19(1)(g). The special burden on imported cement alone was treated as discriminatory, lacking rational nexus with anti-evasion, and inconsistent with articles 14, 303 and 304(a).

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Issues: (i) Whether rule 62-A(2) to 62-A(6) and forms 45-B and 45-C, framed under section 59-A of the Gujarat Sales Tax Act, 1969, were within the rule-making power conferred by section 59-A(3)(a). (ii) Whether the impugned rules and forms imposed an unreasonable restriction on the free flow of trade and commerce in cement, in violation of articles 301 and 304(b) of the Constitution of India and article 19(1)(g). (iii) Whether the special treatment accorded only to imported cement and its importers amounted to hostile discrimination and preferential treatment in breach of articles 14, 303 and 304(a) of the Constitution of India.

Issue (i): Whether rule 62-A(2) to 62-A(6) and forms 45-B and 45-C, framed under section 59-A of the Gujarat Sales Tax Act, 1969, were within the rule-making power conferred by section 59-A(3)(a).

Analysis: Section 59-A created a self-contained scheme for check-post inspection and authorised the rule-making authority only to prescribe documents to be carried with the goods and to require a declaration from the driver or person-in-charge of the vehicle. The statute drew a clear distinction between "documents" and "declaration". The impugned forms, however, required declarations from the importer himself and, in the case of registered dealers, imposed further preconditions under rule 24-B(e) and (f) for obtaining form 45-C. Those requirements did not merely regulate the manner of inspection but introduced a fresh condition on import, in substance operating as a permit regime. Such a scheme could not be traced to the limited authority under section 59-A(3)(a).

Conclusion: The impugned rules and forms were beyond the scope of section 59-A(3)(a) and were ultra vires the Act.

Issue (ii): Whether the impugned rules and forms imposed an unreasonable restriction on the free flow of trade and commerce in cement, in violation of articles 301 and 304(b) of the Constitution of India and article 19(1)(g).

Analysis: Freedom of trade under article 301 is not absolute, but restrictions must be regulatory or compensatory in nature and must not directly and immediately impede movement of trade. The challenged provisions applied only to imported cement and required the importer to obtain and carry a declaration after satisfying unrelated fiscal conditions. The result was that movement of cement from another State into Gujarat could be stalled until the importer complied with matters unconnected with the particular transaction. This did not merely aid inspection or prevent evasion in a neutral manner; it created a direct fetter on import, and the burden was not shown to be reasonable or proportionate to the stated object.

Conclusion: The impugned rules and forms imposed an unreasonable restriction on trade and commerce and were violative of articles 301, 304(b) and 19(1)(g).

Issue (iii): Whether the special treatment accorded only to imported cement and its importers amounted to hostile discrimination and preferential treatment in breach of articles 14, 303 and 304(a) of the Constitution of India.

Analysis: The classification singled out cement and, within that commodity, only imports from outside Gujarat. No intelligible differentia was shown that had a rational nexus with prevention of tax evasion. The material on record indicated that the object was to protect and support local cement manufacturers by making outside cement less competitive. Such a regional preference was inconsistent with the constitutional scheme of equality and free inter-State trade, and article 304(a) did not permit a State to impose a heavier burden on goods from outside the State than on similar local goods. The classification was therefore arbitrary and discriminatory.

Conclusion: The impugned provisions were discriminatory, lacked rational nexus, and violated articles 14, 303 and 304(a).

Final Conclusion: The special declaration and permit-like regime created only for imported cement could not be sustained either as valid delegated legislation or as a permissible restriction on trade. The challenged rules and forms were therefore struck down.

Ratio Decidendi: A delegated rule framed under a limited statutory power to prescribe documents for check-post inspection cannot impose permit-like conditions or unrelated preconditions on import, and any classification that singles out one imported commodity without rational nexus to the stated anti-evasion purpose is unconstitutional.

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