LexM. A. RAHMAN AND OTHERS versus THE STATE OF ANDHRA PRADESH
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March 30. 694 SUPREME COURT REPORTS M. A. RAHMAN AND OTHERS v. THE STATE OF ANDHRA PRADESH (P. B. GAJENDRAGADKAR, A. K. SARKAR, K. N. WANCHOO, K. c. DAS GUPTA and N. RAJAGOPALA AYYANGAR, JJ.) [1962] Motor Spirit-Registration of dealers-If ultra vires the Consti- tution-Constitution of India, Art. r9(r)(g)-The Madras Sales of Motor Spirit Taxation (Andhra Pradesh Extension and Amendment) Act (Andhra Pradesh V of r958)-The Madras Sales of Motor Spirit Taxation Act (VI of r939) ss. 3 and 4, sub-ss. (I) and (4). The Madras Sales of Motor Spirit Taxation Act (Mad. VI of 1939) was made applicable to the State of Andhra Pradesh by the Madras Sales of Motor Spirit Taxation (Andhra Pradesh Extension and Amendment) Act (Andhra Pradesh V of 1958). The purpose and object of the Act was to levy and collect tax on retail sales of motor spirit and the liability for payment was placed upon the person effecting the sale. In order that the State may know the persons from whom tax was due s. 4(1) provided for registration of dealers and s. 4(6) provided for the suspension of such registration in the event of some con- traventions. All that any one who wanted to carry on business had to do was to ask for registration which he would get under the rules. The petitioners who were dealers in motor spirit in Hyderabad filed writ petition challenging the provisions of the said s. 4 of sub-ss. (1) and (6) on the ground that such registra- tion and cancellation were not reasonable restrictions on the fundamental rights of the petitioners to carry on business under Art. lg(r)(g) of the Constitution particularly as the cancellation of registration resulted in the total extinction of the business and was an unreasonable restriction and prayed that sub-ss. (1) and (4) of s. 4 of the Act and r. I4 framed under s. 26 of the Act be declared ultra vires. Held, that the provisions of s. 4(1) of the Act were consti- tutional. Registration of dealers under s. 4(1) was an eminently reasonable provision in order to carry' out the object of the Act, the purpose behind the registration being that those on whom the liability to pay tax under s. 3 of the Act lay, were known to the State, so that it could realise the tax from them. The provision of s. 4(6) for cancellation of registration for failure to pay the tax or for fraudulently evading the payment of it was an additional coercive process which was expected to be immediately effective and enabled the State to realise its revenue. The fact that in some cases restriction might result in the extinction of the business of a dealer would not by itself t • ' ' 1 S.C.R. SUPREME COURT REPORTS 695 make the provision as to cancellation of. registration an un- reasonable restriction on the fundamental right guaranteed by Art. t9(1)(g) of the Constitution. Narendra Kumar v. The Union of India, [1960] 2 S.C.R. 375, referred to. ORIGINAL JURISDICTION: Petition Nos. 145 and 149 to 158 of 1959. Writ Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights. Sardar Bahad,ur, for the petitioners. O. K. Daphtary, Solicitor-General of India, R. Gana- pathy Iyer and T. M. Sen, for the respondents. 1961. March 30. The Judgment of the Court was delivered by :A1. A. Rahman v. The State of Andhra Pradesh WANCHOO, J.-These eleven petitions raise a com- Wanchoo J. mon point and will be disposed of together. The brief facts necessary for present purposes are these. The petitioners are dealers in motor spirit in Hyderabad. In 1949 the Hyderabad Sales of Motor Spirit Taxation Regulation, No. XXIV of 1358 J!'asli (hereinafter called the Regulation) was passed and the petitioners were registered as retail dealers of petroleum products under the Regulation. In 1957 the petitioners and others filed writ petitions in the High Court of Andhra Pradesh questioning the validity of the Regulation. There was also a prayer for stay of the levy and collection of the tax and the High Court ordered that all further proceedings in the matter of levy, demand and collection of tax including cancellation of registra- tion certificate and threatened attachment of property and the launching of criminal proceedings in pursu- ance of the Regulation be stayed. The petitioners allege that on this stay being granted by the High Court, they thought that s. 3 of the Regulation was suspended during the period of stay and therefore they stopped
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