The judgment of the Court was delivered by

K. A. SWAMI, C.J. - The aforesaid writ appeals are preferred against the order dated November 12, 1991 passed by the learned single Judge in W.P. Nos. 948, 949 of 1984, 2736 of 1985 and 7441 of 1986. The learned single Judge, by a common judgment has dismissed all the writ petitions. Aggrieved thereby, the petitioners in the above writ petitions have filed these writ appeals.

2. In the writ petitions, the petitioners sought for a declaration, declaring that the provisions contained in section 12-A of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") are unconstitutional and rule 18-C of the Tamil Nadu General Sales Tax Rules, 1959, hereinafter referred to as "the Rules", is ultra vires of section 12-A of the Act.

3. In the above writ petitions, as the very same relief is sought for, they are directed to be posted along with the writ appeals. Hence, the writ appeals and writ petitions are heard together and they are decided by this common judgment.

4. We may also point out that the appellants, who have preferred writ petitions, apart from challenging the constitutionality of the aforesaid provisions, have also challenged the assessment order. In some of the writ petitions, notices issued for assessment are challenged and in others the assessment orders, in addition to challenging the validity of section 12-A of the Act and the rule 18-C of the Rules, are challenged.

5. The contentions advanced by Mr. C. Natarajan, learned counsel for the petitioners, are as follows :

1. The State under entry 54, List II, can legislate only the tax on the price at which goods are contracted to be sold. The measure of the liability can be the consensual price. The State is not competent to levy sales tax on a fair price or market price disregarding the actual price charged.

2. That as per section 2(n) sale is the transfer of property in goods for cash or deferred payment, an similarly as per section 2(r) turnover is the amount for which goods are sold. Section 3(2) is the charging section. As per this section sales tax is payable by a dealer on the "turnover in each year relating to such goods". Section 12-A is a machinery provision which can only support the charge and cannot be read to widen the charge.

3. Section 12-A cannot apply to bona fide transaction of sale in which the price charged is the actual price received or receivable. For a contract of sale, adequacy or inadequacy of the consideration is not relevant.

4. Section 12-A will apply to cases of under invoicing where the ostensible price does not reflect the true price received. This is evident from the use of the expression "with a view to evade the payment of tax" and again the words "shown in his accounts". If the dealer had actually sold at less than the market price and no further consideration had been received, it is not a case of evasion in terms of the charging section.

5. Rule 18-C ultra vires section 12-A of the Act. Section 12-A does not authorise manner of determination of prevailing market price. In any view, the determination of the turnover is left to the best of judgment of the officer. But rule 18-C(iv) prescribes the fixation of the market price "that should have been charged by the dealer and levy tax on the taxable value so arrived". Whereas the section leaves it to the authority to fix the turnover by best of judgment that power is denied or whittled down by rule 18-C(iv).

6. Mr. R. Venkataraman, learned counsel for the appellants, apart from adopting the contentions urged by Mr. C. Natarajan, learned counsel for the writ petitioners, has urged that fifteen per cent formula provided by rule 18-C of the Rules, itself is unwarranted and impermissible in law, as it does not mention as to the time of sale of goods, and therefore, rule 18-C apart from being violative of section 12-A of the Act, is also bad for being vague and unreasonable.

7. The learned Advocate-General, appearing on