Check-post and penalty rules under sales tax law upheld as reasonable tax-enforcement measures, not unconstitutional trade restraints.

Sections 28-A(2) and 28-A(4) of the Karnataka Sales Tax Act were upheld as valid regulatory measures because they were aimed at preventing tax evasion through document requirements, check-post inspection and penalty for non-compliance. The Court held that these provisions were incidental to the taxing power, did not directly or immediately impede the free flow of trade under Article 301, and therefore did not require Presidential assent under Article 304(b). The challenge under Articles 14 and 19(1)(g) also failed because the restrictions were treated as reasonable and confined to lawful tax enforcement.

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Issues: Whether section 28-A(2) and section 28-A(4) of the Karnataka Sales Tax Act were unconstitutional as violating Articles 14, 19(1)(g), 301 and 304(b) of the Constitution of India, and whether the check-post and penalty provisions were valid regulatory measures incidental to the taxing power.

Analysis: The provisions were challenged on the footing that the requirements to carry and produce documents, obtain seal at the check-post, and face penalty for non-compliance amounted to unreasonable restrictions on trade and movement of goods. The Court held that the object of the provisions was not to levy a confiscatory penalty as such, but to prevent and check evasion of tax in respect of goods moving within the State. The requirement of documents, inspection at the check-post, and power to levy penalty only where no sufficient cause is shown were treated as regulatory and incidental to the power to levy sales tax. The Court also held that the provisions did not directly or immediately impede the free flow of trade within the meaning of Article 301, and therefore no Presidential assent under Article 304(b) was required. The attack based on Articles 14 and 19(1)(g) also failed for the same reason, since the measures were held to be reasonable and confined to lawful tax enforcement.

Conclusion: The provisions were upheld as constitutionally valid and were not found to infringe Articles 14, 19(1)(g), 301 or 304(b) of the Constitution of India.

Final Conclusion: The common challenge to the check-post and penalty provisions failed, and the petitions were dismissed.

Ratio Decidendi: Measures enacted to prevent tax evasion and to regulate movement of goods by requiring prescribed documents and check-post compliance are incidental to the taxing power and do not amount to unconstitutional restrictions on trade unless they directly and immediately impede free commerce.

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