Revisional powers under sales tax law upheld where statute supplies objective limits and constitutional challenge lacks factual foundation

Sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957 were upheld because the revisional powers were confined by objective jurisdictional conditions, including prejudice to revenue and escaped or under-assessed turnover, so they were not treated as arbitrary under article 14. The constitutional attack also failed because the writ petitions lacked specific pleadings and supporting material showing unconstitutional operation or actual prejudice. On the cashewnut and cashew kernel issue, the Supreme Court's declaration that they are different goods was applied without any prospective limitation, so earlier concluded assessments were not saved by prior contrary views or non-collection of tax.

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Issues: (i) Whether sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957 were unconstitutional as conferring arbitrary and uncontrolled revisional power in violation of article 14; (ii) whether the challenge to the validity of those provisions was maintainable on the pleadings and material placed before the Court; (iii) whether the Supreme Court decision holding cashewnut and cashew kernel to be different goods operated only prospectively so as to save the concluded assessments.

Issue (i): Whether sections 14(4-C) and 20 of the Andhra Pradesh General Sales Tax Act, 1957 were unconstitutional as conferring arbitrary and uncontrolled revisional power in violation of article 14.

Analysis: The validity of a taxing statute is tested primarily on legislative competence and infringement of constitutional limitations. The impugned revisional powers were not uncanalised: section 20 could be invoked only where the order or proceeding was prejudicial to the interests of revenue, and section 14(4) could be exercised only where turnover had escaped assessment, been under-assessed, or related levy had escaped or been made at a lower rate. These conditions operated as jurisdictional facts and limiting standards. The mere possibility of misuse or overlapping exercise of power by different authorities did not make the provisions arbitrary. The Court also treated the provisions as machinery provisions, and held that sufficient legislative policy and guidance were present.

Conclusion: The challenge under article 14 failed and the provisions were held valid.

Issue (ii): Whether the challenge to the validity of those provisions was maintainable on the pleadings and material placed before the Court.

Analysis: A constitutional challenge must be supported by a proper factual foundation, specific pleadings, and proof of relevant facts. The writ petitions contained only scanty and general assertions of arbitrariness and discrimination. No adequate factual matrix was laid to show direct injury, unconstitutional operation, or material for testing the alleged vice of the provisions. On that basis, the Court found the pleadings insufficient to sustain the attack.

Conclusion: The constitutional challenge also failed for want of proper pleadings and supporting material.

Issue (iii): Whether the Supreme Court decision holding cashewnut and cashew kernel to be different goods operated only prospectively so as to save the concluded assessments.

Analysis: A declaration of law by the Supreme Court normally applies to all pending and covered transactions unless the Court itself limits the decision prospectively. No such prospective limitation had been imposed. The fact that the assessee may not have collected tax, or that earlier High Court decisions had taken a different view, did not extinguish the statutory liability once the legal position was settled by the Supreme Court. The Court therefore rejected the plea that earlier assessments escaped the effect of the later declaration of law.

Conclusion: The plea of prospective operation was rejected.

Final Conclusion: The writ petitions were unsuccessful, the impugned statutory provisions were upheld, and the reassessment proceedings were not interdicted.

Ratio Decidendi: A taxing provision is not unconstitutional merely because it may be misused; where the statute itself supplies objective jurisdictional conditions and limiting standards, the burden remains on the challenger to establish a clear constitutional infirmity with proper pleadings and proof.

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