Dealer registration and security requirements under a sales tax scheme do not breach Article 14 when based on reasonable classification.

The Assam General Sales Tax Act, 1993 was applied to require dealer registration and furnish security as ancillary measures supporting effective tax collection. The challenge that such notice was without jurisdiction and discriminatory under Article 14 was rejected because the statutory charging and registration scheme operated within a legitimate class of dealers, and reasonable classification permits different treatment of manufacturers and dealers. The analysis emphasised that liability to register arose from the statutory framework, and that non-compliance with registration obligations justified the consequential requirements for security.

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Issues: Whether the notice calling upon the petitioner to seek registration and furnish security under the Assam General Sales Tax Act, 1993 was without jurisdiction and unconstitutional, and whether the levy and consequential requirements could be struck down on the ground of discrimination under Article 14 of the Constitution of India.

Analysis: The petitioner's challenge rested on the premise that its business dealt in cement supplied by an industrial unit said to enjoy tax exemption, and that the demand for registration and security was therefore illegal. The record showed, however, that the petitioner was found liable to be registered under the Act from the relevant date, had not complied with the statutory registration requirement, and had compounded the detected contraventions. The Court held that the charging and registration scheme under sections 7 and 8 imposed liability on dealers according to the statutory framework, and that the State was entitled to prescribe registration and security measures to make the levy effective. The plea of discrimination between manufacturer and dealer was rejected because Article 14 permits reasonable classification and does not prohibit differential treatment of unequal classes.

Conclusion: The notice and the consequential registration and security requirements were upheld, and the writ petition failed.

Ratio Decidendi: A statutory tax scheme that applies uniformly within a legitimate class of dealers, and that includes ancillary measures such as registration and security for effective collection, does not offend Article 14 merely because it treats manufacturers and dealers differently.

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