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TMI Blog1961 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ese 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 (hereinafter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall, 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-sections (2) and (3) make certain ancillary provisions and sub- section (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-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State may have a check on the person from whom the tax is due section 4(1) provides for registration of dealers who carry on the business in motor spirit. Without such registration it would be impossible for the State to know the persons who are selling motor spirit and from whom the tax is due. The provision therefore under section 4(1) for registration of dealers is an eminently reasonable provision in order to carry out the object of the Act, namely, the levy and collection of this tax for purposes of the State. It is really no restriction on carrying on business in motor spirit; any one who carries on such business is free to do so and all that he has to do is to ask for registration, which he will get subject to the provisions of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry on his business in motor spirit. Rule 14 provides conditions under which the registration may be cancelled and we are in the present case concerned with two of them, namely, where the holder of a registration certificate (a) fails to pay the tax or any other amount payable under the Act and (b) fraudulently evades the payment of the tax. The reasonableness of this provision as to cancellation of registration certificate has to be judged in the background of what we have already said about the purpose of the levy and its liability on the seller. It is true that there are other provisions in the law for realisation of public dues from those who default in making payments; but generally speaking cancellation of registration in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and 19(6) of the Constitution includes cases of 'prohibition' also; that where a restriction reaches the stage of total restraint of rights special care has to be taken by the Court to see that the test of reasonableness is satisfied by considering the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to individual citizens by the proposed remedy, the beneficial effect reasonably expected to result to the general public, and whether the restraint caused by the law was more than was necessary in the interests of the general public." Applying these tests we are of opinion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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