Ultra vires tax circular on groundnut movement at check-posts failed for lack of statutory authority.

A circular directing collection of advance tax on movement of groundnuts and groundnut seeds at check-posts was invalid because a statutory authority can act only within powers conferred by the statute or rules. As the circular was not shown to have been issued under any provision of the sales tax enactment or the rules made under it, there was no traceable legal basis for the levy direction. The circular was therefore ultra vires and void, and the writ petition succeeded.

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Issues: Whether the circular directing collection of advance tax on movement of groundnuts and groundnut seeds at check-posts was valid in the absence of traceable statutory authority under the sales tax law.

Analysis: A statutory authority can act only within the powers conferred by the statute or the rules made thereunder. The impugned circular was not shown to have been issued under any provision of the sales tax enactment or the rules framed under it. In the absence of identifiable legal authority to direct collection of advance tax at check-posts, the circular could not stand in law.

Conclusion: The circular was ultra vires and void, and the writ petition succeeded.

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