Sales tax anti-evasion measures upheld, while impracticable importer disclosure requirements were read down to the extent necessary.

Section 59AAA of the Gujarat Sales Tax Act and rule 62AAA were treated as valid regulatory and machinery provisions aimed at identifying consignors, consignees and transporters and preventing evasion of sales tax on specified imported goods; they were upheld as being within the State's sales tax competence and not an undue restriction on trade or commerce. Rule 24B(f) and columns (6), (11) and (12) of form 45C were read down because the prescribed particulars could be impracticable for importers to furnish where the information lay with the transporter; the importer was not to be penalised for non-furnishing of such particulars. Circulars inconsistent with that construction were quashed.

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Issues: (i) Whether section 59AAA of the Gujarat Sales Tax Act, 1969 and rule 62AAA of the Gujarat Sales Tax Rules, 1970 were unconstitutional or beyond legislative competence on the grounds of restriction on trade and commerce and violation of Articles 14, 19(1)(g), 301, 303 and 304 of the Constitution of India. (ii) Whether rule 24B(f) and the particulars required in columns (6), (11) and (12) of form 45C required to be struck down or read down.

Issue (i): Whether section 59AAA of the Gujarat Sales Tax Act, 1969 and rule 62AAA of the Gujarat Sales Tax Rules, 1970 were unconstitutional or beyond legislative competence on the grounds of restriction on trade and commerce and violation of Articles 14, 19(1)(g), 301, 303 and 304 of the Constitution of India.

Analysis: The impugned provisions were treated as machinery and regulatory provisions enacted to identify consignors, consignees and transporters and to prevent evasion of sales tax on specified imported goods. The source of power was traced to the State's legislative field relating to sales and purchases of goods, which includes ancillary and subsidiary measures reasonably connected with tax administration and prevention of evasion. The restrictions were held not to constitute a direct or unreasonable impediment to inter-State trade and commerce.

Conclusion: The challenge to the constitutional validity of section 59AAA and rule 62AAA failed, and those provisions were upheld as valid regulatory measures.

Issue (ii): Whether rule 24B(f) and the particulars required in columns (6), (11) and (12) of form 45C required to be struck down or read down.

Analysis: Certain requirements in the form and the rule were found to be impracticable and unduly burdensome for importers in ordinary trade. The Court accepted the State's stand that these requirements need not be insisted upon where the relevant information was not within the importer's possession and that the transporter's declaration could be relied upon. Clause (f) of rule 24B was confined in its application, and the disputed columns in form 45C were treated as unnecessary to be filled by the importer to the extent the particulars were available from the transporter.

Conclusion: Rule 24B(f) was upheld only to the extent of second and subsequent transactions, and columns (6), (11) and (12) of form 45C were read down so that the importer was not penalised for non-furnishing of particulars available from the transporter.

Final Conclusion: The impugned statutory scheme was sustained in substance, but limited portions of the rules and form were moderated to remove impracticable burdens on importers, and the departmental circulars contrary to that construction were quashed.

Ratio Decidendi: A sales tax enactment may validly include ancillary and regulatory measures to prevent evasion of tax on imported goods, and such provisions can be sustained by reading them down where necessary to remove unreasonable or impracticable burdens without defeating the statutory purpose.

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