The legislature has the power to enact measures to prevent tax evasion, and S.19-B of the K.G.S.T. Act provides safeguards and procedures to prevent arbitrary exercise of power by the assessing authority.

1. The petitioners in O.P.No. 9373 of 1985-C are the appellants herein. The appellants are carrying on business as commission agents for the sale of cured arecanuts. The respondent is the Revenue. The challenge in the Original Petition was against Exts.P7, P8 and P9 notices issued by the second respondent-assessing authority under S.17(3), read with S.19-B, of the K.G.S.T. Act. Exts.P7, P8 and P9 are only notices intimating the petitioners that the final assessments are proposed to be completed as indicated in the said notices. The objections of the petitioners were invited to the proposal. The petitioners filed the O.P. before this court and assailed Exts.P7, P8 and P9 notices and also prayed for a declaration that S.19-B of the K G S.T. Act is unconstitutional and void. Fathima Beevi, J. held that S.19B of the Act is well within the competence of the legislature and cannot be struck down as invalid for the reasons stated by the petitioners. It was further held that the petitioners have been served only with notices in accordance with the statutory previsions and that the Revenue is entitled to proceed in pursuance to the said notices and the petitioners are not entitled to any relief as prayed for. The Original Petition was dismissed. The petitioners in the O.P. have come up in Writ Appeal.

2. We heard counsel for the appellants. It was argued that S.19B of the K.G.S.T. Act is unconstitutional and void. Counsel argued that S.19B vests arbitrary and uncanalised powers on the officers i.e. estimate the value of goods on the basis of the prevailing market price unrelated to the price shown for the goods in the accounts of the dealers. We shall extract S.19B of the Act, in order to understand its true import:

"19B. Assessment in case of undervaluation. (1) If the assessing authority is satisfied that a dealer has, with a view to evade the payment of tax, shown in his accounts, sale or purchase of any goods at prices lower than the prevailing market price of such goods, It may estimate the value of each goods on the basis of the prevailing market price and assess or reassess the dealer to the best of its judgment, after making such enquiry as it may consider necessary and after affording the dealer a reasonable opportunity of being heard."

Under Schedule VII, List II, Entry 54, the State Legislature is empowered to enact the law imposing tax on the sale or purchase of goods other than newspapers subject to the provisions of Entry 92A of List I. The various entries to the Lists are 'fields of legislation'. They should be understood in the widest scope. The words used therein should accordingly be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. It is settled law that in the case of taxing statutes the ancillary or subsidiary matters will extend to the making of effective and meaningful provisions for the prevention of evasion of tax. The legislature having power to impose the tax has also the power to prescribe the means by which the tax shall be collected. This will fake in the power to enact measures to ensure proper realisation of the taxes due. Measures can also be made to prevent evasion of tax. This is a machinery provision which should be construed liberally. These proposition of law cannot be open to any doubt in determining the validity of a prevision in a taxing statute. On a fair leading of S.19B of the K.G.S T. Act, we concur wish the learned Single Judge in her reasoning and conclusion. After referring to the decisions of the Supreme Court in Navanit Lal v. I. T. App. Asst Commissioner (AIR 1965 SC 1375) and Beldeo Singh v. I.T. Commr. (A.I.R. 1961 S.C. 736), the learned Single Judge concluded in Para.4 and 5, to the following effect.

"4. S.19B does not preclude the application of the principles of natural justice. It is not correct to say that it is an arbitrary power to assessing authority to estimate the value of the goods. He has to conduct necess