S.19C of the KGST Act, allowing for protective assessment, is within the competence of the State Legislature and is intended to prevent tax evasion by recognizing the liability of the real dealer.

The petitioner is a dealer registered under the Kerala General Sales Tax Act, 1963 (the KGST Act, in brief ). It is being proceeded against under S.19C of the said Act on the ground that it had, during the assessment year 1983-84, done business in the name of one B.T. Mammoo, (who has been impleaded as the third respondent), that the said Mammoo was only a benamidar for the petitioner and that both the petitioner and the said Mammoo are jointly and severally liable for payment of the tax under S.19C of the KGST Act. The notice Ext. P2 dated 15-2-1991 was accordingly issued to the petitioner calling upon it and the third respondent to show cause why they should not be so made liable under S.19C. The petitioner submitted its objections Ext. P3 and filed this writ petition challenging the constitutional validity of S.19C.

2. The petitioner had earlier been assessed to tax for the year 1983-84, both under the KGST Act and the central Sales Tax Act, 1956 on a turnover of Rs.2,97,530/- and Rs. Nil respectively. These assessments were reopened subsequently as a result of enquiries which revealed that the petitioner had done business in the name of a benamidar M/s. Century Corporation at Kannur, of the third respondent; and fresh assessments completed on turnover of Rs. 1,51,57,520/- and Rs. 1,86,66,260/- respectively under the two Acts. These revised assessments were set aside in appeal by the Deputy Commissioner (Appeals) with direction to re-do the assessments after giving the petitioner a reasonable opportunity to prove its case and to rebut the evidence relied on by the revenue. Though the order was only one of remand and nothing had been foreclosed or concluded against it by the appellate order, the petitioner took the matter in appeal before the Appellate Tribunal apparently seeking a decision on the merits; the Revenue cross appealed with the contention that the petitioner had been afforded reasonable opportunities at the time the revised orders of assessment were passed and therefore there was no justification for the remand to afford a further opportunity to the petitioner. The Tribunal however refused to be drawn into the controversy and confirmed the order of remand, merely clarifying that it was an open remand with liberty to the petitioner to raise all its contentions before the assessing authority. A copy of the order of the Tribunal is Ext. P1. It was while the matter was thus pending fresh assessment that the notice Ext. P2 was issued under S.19C of the KGST Act and the petitioner replied by Ext. P3.

3. Though the petitioner has raised various contentions in the writ petition on the merits of the case, I am not adjudicating on the same as they are points which could be raised before the statutory authority and adjudged by him. It is not for this court to interpose a decision when the matter is-pending consideration before that authority. A decision on the merits was, in fact, very seriously opposed by the learned Government Pleader Sri. S. Vijayan Nair, according to whom there was large sale tax evasion involved in this case. It was his submission that despite the pompous business name of the third respondent, he was only a petty benamidar of the petitioner and the whole thing was only a shrewed attempt to defeat the State of its dues. I leave all these matters for decision of the authorities as matters on which this court should not speak at this stage of notice to show cause. I am therefore confining my consideration strictly to the constitutional points raised about the validity of S.19 C. S.19C reads: -

"19C. Protective assessment: -Notwithstanding anything to the contrary contained in any judgment, decree, order, direction or decision of any Court, Tribunal or other Authority, where the assessing authority has reason to believe that any person is, or was carrying on business in the name of, or in association with any other person, either directly, or indirectly, whether as agent, employee, manager, power