A State Legislature cannot impose restrictions on the inter-State movement of goods, which are not necessary for the prevention of tax evasion.

S.S.SANDHAWALIA, J.

1. The significant issue that emerges for adjudication in this reference to the Full Bench is whether the Notification No. S.O. 1432, dt. 28th Nov., 1985, issued in exercise of the powers conferred by Sub-Sec. (2a) of S.31 of the Bihar Finance Act (hereinafter referred to as the Act) prescribing the declaration form to be carried on a goods carrier or a vessel for transporting goods through the State of Bihar during the course of inter-State trade, is violative of the freedom of trade guaranteed by Arts.301 and 304 of the Constitution ? Equally at issue is a minor cleavage of judicial opinion within this Court betwixt two Division Bench orders passed at the motion stage.

2. In the context of the aforesaid pristinely legal question, the facts inevitably pale into relative insignificance. These may, therefore, be briefly noticed from Civil Writ Jurisdiction Case No. 990 of 1986 (R). The petitioner therein is the proprietor of M/s. Jai Durga Industries - a firm which regularly imparts foodgrains from other States to its business premises situated at Jamshedpur. The said firm is registered under the Bihar Sales Tax Act as well as under the Central Sales Tax Act. It is averred that the petitioner purchased 165 bags of mustard (sarso) from M/s. Kapur Chand Girish Chand Jain at Dhaulpur in the State of Rajasthan, and was transporting the same therefrom to Jamshedpur in the State of Bihar in Truck No. RSG 533. On the 13th Feb., 1986 the officers of the Investigation Bureau, Jamshedpur Division, inspected the said truck and all necessary papers including a road permit in Form XXVII for the 165 bags of mustard (sarso) were produced at the time of inspection. Nevertheless, the inspecting officers seized the goods loaded in the aforesaid truck and detained it at Mango Mufassil Police Station at Jamshedpur, on the allegation that the Bill number was not mentioned in Column No. 9 of the road permit in Form XXVIII-B, and issued show cause notice to the petitioner as to why penalty should not be imposed under S.31(3) of the Act. The petitioner was directed to appear before the inspecting officer on the 14th of February, 1986. The petitioner being a member of the Singhbhum Chamber of Commerce and Industry, moved the said organisation to agitate the matter before the authorities and the said Chamber presented a representation in pursuance whereof the truck and the goods therein were released on the 15th Feb., 1986. However, in reply to the notice issued against the petitioner for the imposition of penalty, he took the stand that no permit in the required form was necessary and in any case it was violative of the Constitutional right of the freedom of inter-State trade and commerce. The petitioners stand was, however, rejected and respondent 3 is averred to have arbitrarily and without any jurisdiction imposed a penalty of Rs. 8,330.00 vide the order Annexure-5, dated the 29th of May, 1986 and the consequential demand Notice No. 986 (Annexure-6), dated the 2nd of June, 1986. Aggrieved thereby, the present petition has been filed challenging, inter alia, the very constitutionality of the impugned notification on the ground of its infraction of the freedom of trade guaranteed by Arts.301 and 304 of the Constitution.

3. The case along with C.W.J.C. 991 of 1986(R), (M/s. Chetani Trading Company V/s. State of Bihar and others) in which closely similar issues of fact and law are involved came up for admission before a Division Bench. On behalf of the petitioners firm reliance was placed on Civil Writ Jurn. Case No. 1079 of 1985(R), (Lohia Machine Ltd. V/s. State of Bihar) decided on 4-9-85*which in turn was rested on 1980 BR and LJ 110, (Bhagwan Prasad V/s. Officer-in-Charge, Hathidih Check Post, Mokameh), for contending that in inter-State trade no permit under R.42 was required to be carried. However, on behalf of the respondent State the recent Division Bench judgement in C.W.J.C. 1625 of 1986, (Madan Mohan Tiwary and ot