Tax-evasion prevention machinery under sales tax law upheld where payment reflected already incurred liability and supported detention power.

Section 29A(2B) of the Kerala General Sales Tax Act, read with the connected circular, was upheld as a valid tax-mobilising machinery provision aimed at curbing evasion in goods transported outside the State. The Court construed "payable" to mean tax liability already incurred on the taxable event, so the provision enabled collection before regular assessment without creating a new levy. It found a rational nexus between the classification and the object of preventing evasion, and held that the "reason to believe" requirement adequately guided detention power. Section 29A(2A) was also upheld, as no separate infirmity was established.

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Issues: (i) Whether section 29A(2B) of the Kerala General Sales Tax Act, 1963 and the connected circular were unconstitutional or ultra vires on the grounds of arbitrariness, violation of free movement of goods, and excess of delegated power. (ii) Whether section 29A(2A) of the Kerala General Sales Tax Act, 1963 was valid.

Issue (i): Whether section 29A(2B) of the Kerala General Sales Tax Act, 1963 and the connected circular were unconstitutional or ultra vires on the grounds of arbitrariness, violation of free movement of goods, and excess of delegated power.

Analysis: The impugned provision was treated as a special machinery provision inserted to prevent large-scale tax evasion in goods transported outside the State. The expression "payable" was construed in context to mean liability already incurred on the taxable event, so that the provision enabled collection before the normal assessment stage without creating a new tax burden. The circular was read as an implementation measure and not as an enlargement of the statutory power. The Court found a reasonable nexus between the classification adopted and the object of suppressing evasion, and held that the condition of "reason to believe" provided adequate guidance for exercise of the detention power.

Conclusion: Section 29A(2B) and the circular were upheld as valid and not violative of Articles 14 or 301 of the Constitution of India.

Issue (ii): Whether section 29A(2A) of the Kerala General Sales Tax Act, 1963 was valid.

Analysis: No substantial argument was advanced against this provision, and no separate infirmity was found in it on the record before the Court.

Conclusion: Section 29A(2A) was upheld as valid.

Final Conclusion: The writ appeals failed, and the common judgment upholding the main impugned provisions substantially remained undisturbed.

Ratio Decidendi: A tax-mobilising machinery provision enacted to curb evasion may validly require payment of tax already incurred before the ordinary assessment stage, and a circular issued to implement such a provision is valid if it stays within the statutory scheme and is supported by a rational nexus to the legislative object.

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