Wanchoo, J. - (1.)These eleven petitions raise a common point and will be disposed of together. The brief facts necessary for present purposes are these. The petitioners are dealers in motor spirit in Hyderabad. In 1949 the Hyderabad Sales of Motor Spirit Taxation Regulation, No. XXIV of 1358 Fasli thereinafter called the Regulation) was passed and the petitioners were registered as retail dealers of petroleum products under the Regulation. In 1957 the petitioners and others filed writ petitions in the High Court of Andhra Pradesh questioning the validity of the Regulation. There was also a prayer for stay of the levy and collection of the tax and the High Court ordered that all further proceedings in the matter of levy demand and collection of tax including cancellation of registration certificate and threatened attachment of property and the launching of criminal proceedings in pursuance of the Regulation by stayed. The petitioners allege that on this stay being granted by the High Court, they thought that S. 3 of the Regulation was suspended during the period of stay and therefore they stopped collecting the tax from consumers. While these petitions were pending in the High Court, the Madras Sales of Motor Spirit Taxation (Andhra Pradesh Extension and Amendment) Act, No. V of 1958 (hereinafter called the Act), was passed by which the Madras Sales of Motor Spirit Taxation Act, No. VI of 1939 was applied to Andhra Pradesh with some modifications and the Regulation was repealed. This Act, like the Regulation, had provisions for registration of dealers and in consequence fresh registration certificates were issued to the petitioners as well as to all other dealers in the State. In August 1958 the petitions challenging the validity of the Regulation were dismissed. In September 1958 notices were issued to the petitioners informing them that they had failed to submit returns showing sales of motor spirit from March 1957 to March 1958 and they were required to submit returns within seven days, failing which best judgment assessments would be made under the relevant provisions of the Regulation. The petitioners made representations against this order and their main case was that they had not collected and tax from consumers during this period and it would therefore be harsh to demand tax from them in the circumstances. Thereupon it is said that best judgment assessments were made against the petitioners and they were required to pay the tax though liberty to pay in instalments was granted to them for this purpose. As however the petitioners failed to deposit the tax even in instalments, the registration certificate of one of the petitioners was cancelled and other petitioners were threatened with cancellation of their registration certificates about October 1959. Consequently, the present petitions were filed soon after challenging the provisions of the Act relating to cancellation of registration certificates on the ground that such cancellation was not a reasonable restriction on the fundamental rights of the petitioners to carry on business under Art. 19(1)(g) of the Constitution. The petitioners therefore pray for a declaration that sub-secs. (1) and (6) of S. 4 of the Act and R. 14 purported to be framed thereunder are ultra vires as being violative Art. 19 (1)(g) of the Constitution and for consequential orders against the respondents, namely, the State the Andhra Pradesh and its officers from enforcing the said provisions.
(2.)The petitioners have been opposed by the respondents and their case is that the provisions in question are reasonable restrictions on the right guaranteed under Art. 19 (1)(g) and are therefore perfectly valid and constitutional. The respondents also say that the allegation of the petitioners that they did not collect the tax during the period of the stay orders from consumers is false.
(3.)In order to decide the constitutionality of the provisions which have been challenged it is necessary to look into the purpose and object of the Act in which those provisions appear. The Act was passed in order to levy and collect tax on retail sales of motor spirit in the interest of the general revenues of the State. Section 2 of the Act is the definition section. Section 3 is the charging section and provides the rates at which the tax is to be levied on all retail sales of motor spirit. Section 4 (1) which is being challenged is in these terms:-
"No person shall, after the commencement of this Act, carry on business in motor spirit as an importer or as a wholesale or retail dealer at any place in the State unless he has been registered as such under this Act.
Sub-section (2) and (3) make certain ancillary provisions and sub-sec. (4) is in these terms:-
"Registration may be made subject to such conditions, if any, as may be prescribed including in the case of an applicant for registration as a retail dealer, the making of such deposit or the furnishing of such security as the registering authority may consider necessary to ensure the due payment of the tax which may from time to time be payable by him."
Sub-section (5) is unnecessary for our purpose, and sub-sec. (6) is in these terms:-
"Any registration under sub-sec. (1) may be suspended or cancelled by such authority, for such reasons, and in such manner as may be prescribed."
It is not necessary to refer to other sections which make various provisions necessary for the enforcement of the Act till we come to S. 26 which gives power to the State Government to make rules to carry out the purposes of the Act. Rule 14 which has been attached has been made under the power conferred under S. 26 and it is not being disputed that if the main provisions contained in S. 4 are constitutional, the rule is within the ambit of the Act and the rule making power of the State Government .