The power to seize and confiscate goods carried in a vehicle must be within the jurisdiction of the State Legislature and should be incidental or ancillary to the power to levy sales tax.

Harbans Singh, J.

1. Facts necessary for the decision of this appeal under Clause 10 of the Letters Patent against the order of the learned single Judge in Civil Writ No. 3289 of 1971 may be stated as follows:

2. A consignment of tyres and tubes was sent by M/s. Dunlop India Limited (hereinafter referred to as the company) from West Bengal to their sub-depot at Jullundur through Messrs. Central Goods Transport Corporation, Calcutta, on 29th June, 1970. At the Shamboo barrier in Patiala District on the vehicle being checked by the Taxation Inspector on duty on 6th July, 1970, there was found some discrepancy between the value of the goods as given in form ST XXIV, which was Rs. 50,000, and the invoices and other documents, which showed the value as Rs. 1,15,518.25. For this discrepancy, the goods were seized and were released only on payment of Rs. 7,000. This was done under Section 14-B of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act).

3. Sub-section (8) of Section 14-B of the Act is to the following effect:

Where the declaration made under Sub-section (3) is false in respect of any particulars mentioned therein, the officer-in-charge of the check post or barrier or any other officer not below the rank of an Assistant Excise and Taxation Officer shall have the power to seize the goods in respect of which the declaration is false: Provided that an officer acting under Sub-section (6) or Sub-section (8) may, before or after such seizure, give to the person affected an option to pay, in lieu of seizure and in addition to the tax recoverable, a sum of money not exceeding one thousand rupees or double the amount of tax recoverable, whichever is greater....

4. The writ petition, aforementioned, was filed by the company challenging the act of the department in seizing the goods and charging Rs. 7,000 before releasing the same. The learned single Judge felt that the matter was covered by a decision of the Supreme Court reported as Check Post Officer, Coimbatore, and Ors. V/s. K.P. Abdulla and Brothers [1971] 27 S.T.C. 1 (S.C.). In that case Sub-section (3) of Section 42 of the Madras General Sales Tax Act, 1959 , was under consideration, and that sub-section was in the following terms:

The officer-in-charge of the check post or barrier...shall have power to seize and confiscate any goods which are under transport by any vehicle or boat and are not covered by, (i) a bill of sale or delivery note, (ii) a goods vehicle record...and (iii) such other documents as may be prescribed.... Provided further that the officer ordering the confiscation shall give the person affected option to pay in lieu of confiscation -- (a) in cases where the goods are taxable under this Act, in addition to the tax recoverable, a sum of money not exceeding one thousand rupees or double the amount of tax recoverable, whichever is greater....

5. From the above it is clear that the two provisions were pari materia. Their Lordships of the Supreme Court after considering entry 54, List II, of the Seventh Schedule to the Constitution, came to the conclusion that such a seizure is not permissible and is beyond the jurisdiction of the State Legislature. This is what was observed:

But, in our judgment, the power to confiscate goods carried in a vehicle cannot be said to be fairly and reasonably comprehended in the power to legislate in respect of taxes on sale or purchase of goods...Sub-section (3) assumes that all goods carried in a vehicle near a check post are goods which have been sold within the State of Madras and in respect of which liability to pay sales tax has arisen, and authorises the Check Post Officer, unless the specified documents are produced at the check post or the barrier, to seize and confiscate the goods and to give an option to the person affected to pay penalty in lieu of confiscation. A provision so enacted on the assumption that goods carried in a vehicle from one State to another must be presumed to be tran