Transporter registration security requirement upheld as a regulatory measure to prevent tax evasion and protect trade flow.

Security money demanded for transporter registration under section 38-B of the Tripura Sales Tax Act and rule 64-A was treated as a regulatory condition aimed at preventing tax evasion and facilitating identification of consignors, consignees and taxable goods. The registration, accounting and declaration requirements for transporters were characterised as measures in aid of revenue collection, not as a tax on trade itself. The condition was held to fall within the Commissioner's discretion under rule 64-A and not to directly or immediately restrict the free flow of trade, so it did not infringe articles 301 or 304(b) of the Constitution.

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Issues: Whether the demand of security money for granting registration to a transporter under section 38-B of the Tripura Sales Tax Act, 1976 read with rule 64-A of the Tripura Sales Tax Rules, 1976 was illegal, unreasonable, or unconstitutional as offending the freedom of trade and commerce.

Analysis: The registration requirement for transporters was held to be part of the statutory mechanism designed to carry out the purposes of section 38 and to prevent evasion of tax. The provisions governing transporters, including the obligation to maintain accounts, furnish declarations, and obtain registration, were treated as regulatory measures in aid of revenue collection and not as a tax on trade itself. The demand of security was viewed as falling within the Commissioner's discretion under rule 64-A and as serving the legitimate objective of identifying consignors and consignees and tracing taxable goods. The Court held that such a condition did not directly and immediately impede the free flow of trade and therefore did not violate articles 301 and 304(b) of the Constitution.

Conclusion: The demand of security money was upheld as lawful and within the statutory power of the Commissioner, and the writ petition failed.

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