JUDGMENT 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". 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. 7. The learned Advocate-General, appearing on behalf of the State, not only refuted the correctness of the contentions urged on behalf of the write petitioners and the appellants, but also maintained that section 12-A of the Act is a machinery provision and it is well within the legislative competence of the State Legislature and that it is intended to plug the holes in the Act, in order to prevent evasion of tax and that rule 18-C of the Rules only provides certain norms on the basis of which consensual price can be determined in case it becomes necessary having regard to the provisions contained in section 12-A of the Act, that the norms mentioned therein are only illustrative and they cannot be considered to be exhaustive one. 8. In support of their respective contentions, learned counsel appearing for the petitioners and appellants, and the learned Advocate-General for the State, have relied upon certain decision. We will advert to them at the appropriate stage, in the course of this judgment. 9. Re. section 12-A of the Act. Entry 54, List II of Seventh Schedule of the Constitution reads thus : "Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I." 10. Entry 92-A, List I of Seventh Schedule of the Constitution reads thus : "Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce". It may be pointed out that entry 54 of List II and entry 92-A of List I came to be inserted by the Constitution Sixth Amendment Act, 1956. Entry 92-A of List I of Seventh Schedule, deals with taxes on the sale or purchase of goods, but it confines to the sale or purchase of goods taking place in the course of inter-State trade or Commerce and also excludes the newspapers. Entry 92-A of List I of Seventh Schedule, deals with taxes on the sale or purchase of goods, but it confines to the sale or purchase of goods taking place in the course of inter-State trade or Commerce and also excludes the newspapers. Whereas, entry 54 of List II, only deals with the taxes on the sale or purchase of goods other than newspapers subject to the provisions contained in entry 92-A of List I. Thus it is clear that the power of the State Legislature extends to levy and collection of tax on sale or purchase of goods other than newspapers in the State and such sales or purchases not taking place in the course of inter-State trade and commerce, because entry 54 of List I is subject to the provisions of entry 92-A of List I of the Seventh Schedule. 11. In order to determine whether section 12-A of the Act falls within the legislative competence of the State Legislature, as contained in entry 54 of List II of the Seventh Schedule read with article 246(3) of the Constitution, we have to find out whether section 12-A of the deals with the sales tax on the sales or purchases of goods in the State. 12. Section 12-A of the Act reads thus : "12-A. Assessment of sales shown in accounts at low prices. - (1) If the assessing authority is satisfied that a dealer has, with a view to evade the payment of tax, shown in his accounts, sales or purchases of any goods, at prices which are abnormally low, compared to the prevailing market price of such goods, it may, at any time within a period of five years from the expiry of the year to which the tax relates, assess or reassess the dealer to the best of its judgment on the turnover of such sales or purchases after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. (2) The provisions of sub-section (2) to (5) of section 16, shall, as far as may be, apply to assessment or reassessment under sub-section (1) as they apply to the reassessment of escaped turnover under sub-section (1) of section 16." 13. (2) The provisions of sub-section (2) to (5) of section 16, shall, as far as may be, apply to assessment or reassessment under sub-section (1) as they apply to the reassessment of escaped turnover under sub-section (1) of section 16." 13. From the contents of section 12-A of the Act, it is clear that the said provision has been inserted only with a view to prevent evasion of tax by the assessee who with a view to evade the payment of tax has shown in his accounts sales or purchases of goods at prices which are abnormally low compared to the prevailing market price of such goods. The statement of objects and reasons for introducing such a provision specifically discloses the intention of the Legislature and the same are as follows : "STATEMENT OF OBJECTS AND REASONS The Government set up the Tamil Nadu Sales Tax Committee in 1977 to comprehensively examine the procedures in regard to assessment, collection and appeal in the matter of sales tax law with a view to suggest changes which would subserve the triple objectives of reducing hardship to the assessees, improving collections and eliminating corruption. The Committee had made certain recommendations with regard to among others, refund of tax in respect of sales return, the procedure adopted at check-posts, imposition and reduction of penalty, etc., to mitigate the hardship experienced by dealers. The Committee has also agreed with certain recommendations of the Officer on Special Duty for Rationalisation and Simplification of Commercial Taxes Acts and Rules with regard to levy of penalty, detention of goods at check-posts, etc. The Government have examined the above recommendations and have decided to amend suitably the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959). 2. The Government have also decided to amend items 86 and 120 of the First Schedule to the Act so that hosiery goods made out of staple fibre yarn are also taxed at 5 per cent single point as in the case of hosiery goods made of cotton yarn while hosiery goods made wholly or partly of wool are continued to be taxed at 8 per cent single point. Under item 103 of the First Schedule, biscuits, toffees, chocolates, etc., which are tinned, canned, bottled, or packed and sold as such under any brand name registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958) are taxed at 8 per cent single point and if they are sold without any packing, they are taxed at 4 per cent multipoint. To obviate the said anomaly, the Government have decided to amend item 103 of the First Schedule so as to levy the same rate of tax at 8 per cent single point whether they are sold in packed condition or sold in loose form. The above changes have been given effect to by notifications issued under sub-section (1) of section 59 of the Tamil Nadu General Sales Tax Act, 1959. It is proposed to replace the said notifications. Under sub-section (2) of the said section 59, a Bill to replace the aforesaid notifications has to be introduced in the next session of the Legislature following the date of issue of the notification. 3. The Bill seeks to give effect to the above decisions. The provisions of the Bill are explained in the notes on clauses." 14. Note on clause 4 of the L.A. Bill No. 73 of 1979, which related to section 12-A of the Act in question was as follows : "A new section 12-A is provided for assessment of tax in cases where the dealer has, with a view to evade payment of tax, shown in the accounts, sales or purchases of any goods at abnormally low prices compared to the prevailing market price of such goods." The aforesaid note makes it clear that the intention of the Legislature is to cover such cases, where the dealer has, with a view to evade payment of tax, shown in the accounts, sales or purchases of any goods at abnormally low price compared to the prevailing market price of such goods. This intention is reflected in unequivocal terms in section 12-A of the Act. The Tamil Nadu General Sales Tax (Second Amendment) Act, 1979 (Act 47 of 1979) has amended several provisions of the Act. It has also introduced new provisions and section 12-A of the Act is one of them. This intention is reflected in unequivocal terms in section 12-A of the Act. The Tamil Nadu General Sales Tax (Second Amendment) Act, 1979 (Act 47 of 1979) has amended several provisions of the Act. It has also introduced new provisions and section 12-A of the Act is one of them. We have already extracted the note on clause 4 as contained in L.A. Bill No. 73 of 1979, disclosing the intention of the Legislature for inserting a new provision as contained in section 12-A of the Act. It is also relevant to notice at this stage that before passing the Tamil Nadu General Sales Tax (Second Amendment) Act, 1979 (Act 47 of 1979) the State Government had appointed the Tamil Nadu Sales Tax Committee, in 1979. The said Committee went into several matters, made indepth study and also noticed the fraud committee in invoicing with a view to evade payment of tax on sales and purchases. It recommended thus : "14.2 Under Invoicing frauds. 14.2.1. Another method of evading a sizable portion of the tax is by the manufacturer of the product subject to single point sales tax making sales to a closely related person or closely held company or subsidiary or an associated concern at prices much lower than the market price. These are called sole distributors or sole agents or given some other suitable nomenclature. Sales tax at the first point will be levied on the invoice value when the manufacturer makes the sale at a "low" price. These intermediaries by whatever name called become the second sellers and sell the goods at a price very much higher than the first sale invoice price. 14.2.2 : In such cases of deliberate under invoicing evasion, the committee feels that the power should be available to the assessing officers to determine the fair market price at which the goods could and should have been sold. In effect, they determine the fair market price and levy the tax on the basis of the sale value as determine." 15. In effect, they determine the fair market price and levy the tax on the basis of the sale value as determine." 15. Section 2(n) of the Act defines "sale" as follows : "'sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods (other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of business for cash, deferred payment or other valuable consideration and includes....." The other provisions contained in that definition need not be referred to for our purpose. What is relevant to be noticed is that sale means the transfer of property in goods by one person to another in the course of business for cash, deferred payment or other valuable consideration. 16. The expression "turnover" is also defined in section 2(r) of the Act. What is relevant to be noticed is that sale means the transfer of property in goods by one person to another in the course of business for cash, deferred payment or other valuable consideration. 16. The expression "turnover" is also defined in section 2(r) of the Act. It reads thus : "'turnover' means the aggregate amount for which goods are bought or sold, or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n), by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment, or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea and rubber (natural rubber latex and all varieties and grades of raw rubber) grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover." Therefore it is contended that as the taxable turnover would depend upon the sale and purchase of goods by transferring the property in goods, by one person to another, in the course of business for cash or for deferred payment or other valuable consideration, etc., as agreed to by the parties to the transaction and as the State Legislature is competent to levy tax only on such value of the sale or purchase of goods, it is not open to the State Legislature to make a provision for determining the real value of the goods sold or purchased for the purpose of sales tax, therefore, the provisions contained in section 12-A of the Act, to the extent it enable the assessing authorities to determine the price of goods sold or purchased, falls outside the competence of the State Legislature and therefore, it is bad in law. 17. No doubt in State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1958] 9 STC 353 (SC), it has been specifically stated thus : "We are unable to agree with this contention. If the words 'sale of goods' have to be interpreted in their legal sense, that sense can only be what it has in the law relating to sale of goods. (Madras) Ltd. [1958] 9 STC 353 (SC), it has been specifically stated thus : "We are unable to agree with this contention. If the words 'sale of goods' have to be interpreted in their legal sense, that sense can only be what it has in the law relating to sale of goods. The ratio of the rule of interpretation that words of legal import occurring in a statute should be construed in their legal sense is that those words have, in law, acquired a definite and precise sense, and that, accordingly, the Legislature must be taken to have intended that they should be understood in that sense. In interpreting an expression used in a legal sense, therefore, we have only to ascertain the precise connotation which it possesses in law. It has been already stated that, both under the common law and the statute law relating to sale of goods in England and in India, to constitute a transaction of sale there should be an agreement, express or implied, relating to goods to be completed by passing of title in those goods. It is of the essence of this concept that both the agreement and the sale should relate to the same subject-matter. Where the goods delivered under the contract are not the goods contracted for, the purchaser had got a right to reject them, or to accept them and claim damages for breach of warranty. Under the law, therefore, there cannot be an agreement relating to one kind of property and a sale as regards another. We are accordingly of opinion that on the true interpretation of the expression 'sale of goods' there must be an agreement between the parties for the sale of the very goods in which eventually property passes." But the question for consideration is whether section 12-A of the Act really tries to redetermine the price of sale or purchase of goods or it only empowers the authorities for the purpose of determining the sales tax as to what is the consensual price of goods sold or purchased. A reading of the provision contained in section 12-A of the Act will clearly show that it is only a machinery provision intended to determine whether the returns submitted by a dealer are true and correct and they represent the consensual price of the transactions. A reading of the provision contained in section 12-A of the Act will clearly show that it is only a machinery provision intended to determine whether the returns submitted by a dealer are true and correct and they represent the consensual price of the transactions. As already pointed out, it is intended to prevent the evasion of payment of tax and for that purpose it empowers the assessing authorities to compare the price mentioned in the accounts relating to sale or purchase of goods as stated in the return submitted with the prevailing market price of such goods, and to make best of judgment assessment on the turnover, after such enquiry as the assessing authority may consider necessary, that too, after giving a reasonable opportunity to the dealer to show cause against such assessment. It may be pointed out that sub-section (2) of section 12-A of the Act specifically makes the provisions contained in sub-section (2) to (5) of section 16 applicable to assessment or reassessment proceedings under section 12-A(1), as they apply to reassessment of escaped turnover under section 16(1) of the Act. The only distinction between section 16 and section 12-A of the Act is that whereas section 16 of the Act relates to escaped turnovers which has/have not been accounted for and section 12-A of the Act deals with the turnovers, which have been accounted for but enables the assessing authorities to determine whether the price mentioned therein is bona fide and can be accepted as representing true and real concessional price as reflected in the accounts when compared with the price that prevailed in the market at that time. Therefore, it is not possible to hold that the provisions contained in section 12-A of the Act impinge upon the legislative power of the Parliament as contained in entry 92-A of List I of Seventh Schedule, thereby travelling beyond the scope of the power conferred upon the State Legislature under entry 54 of List II of Seventh Schedule. Therefore, it is not possible to hold that the power to determine, as conferred by section 12-A of the Act on the assessing authority, as to whether the price stated in the return relating to sale or purchase of such goods is true and represents the real market price or not, would amount to effecting the deemed sale or interfering with the sale or purchase transaction. In effect the entire exercise under section 12-A of the Act is to determine whether there is an attempt on the part of the dealer to evade the payment of sales tax. This exercise is undertaken when a doubt is entertained about the bona fide and true nature of the sales shown in the accounts at low price. As the very heading of the section indicates, it is nothing but an assessment of sales shown in accounts at low prices. Of course the assessing authority should be careful and should ensure that bona fide transactions of sale are not unnecessarily subjected to this exercise if the assessing authority, taking into consideration surrounding circumstances, is satisfied that there is no attempt to evade tax and the sale transaction is bona fide. 18. The learned counsel for the appellants has placed reliance on a decision of the Supreme Court reported in K. P. Varghese v. Income-tax Officer, Ernakulam [1981] 131 ITR 597, in support of the contention that the exercise of power under section 12-A of the Act would result in the turnover being taxed, which has neither accrued to the assessee nor has been received by him and therefore, it would not be well within the power of the State Legislature. In the said decision, the Supreme Court has observed thus : "Moreover, if sub-section (2) is literally construed as applying even to cases where the full value of the consideration in respect of the transfer is correctly declared or disclosed by the assessee and there is no understatement of the consideration, it would result in an amount being taxed which has neither accrued to the assessee nor has been received by him and which from no view-point can be rationally considered as capital gains or any other type of income. It is a well-settled rule of interpretation that the court should as far as possible avoid that construction which attributes irrationality to the Legislature. Besides, under entry 82 in List I of the Seventh Schedule to the Constitution, which deals with 'Taxes on income other than agricultural income' and under which the Income-tax Act, 1961, has been enacted, Parliament cannot 'choose to tax as income an item which in no rational sense can be regarded as a citizen's income or even receipt. Besides, under entry 82 in List I of the Seventh Schedule to the Constitution, which deals with 'Taxes on income other than agricultural income' and under which the Income-tax Act, 1961, has been enacted, Parliament cannot 'choose to tax as income an item which in no rational sense can be regarded as a citizen's income or even receipt. Sub-section (2) would, therefore, on the construction of the revenue, go outside the legislative power of Parliament and it would not be possible to justify it even as an incidental or ancillary provision or a provision intended to prevent evasion of tax. Sub-section (2) would also be violative of the fundamental right of the assessee under article 19(1)(f) - which fundamental right was in existence at the time when sub-section (2) came to be enacted - since on the construction canvassed on behalf of the revenue, the effect of sub-section (2) would be to penalise the assessee for transferring his capital asset for a consideration lesser by 15 per cent or more than the fair market value and that would constitute unreasonable restriction on the fundamental right of the assessee to dispose of his capital asset at the price of his choice. The court must obviously prefer a construction which renders the statutory provision constitutionally valid rather than that which makes it void. We must, therefore, hold that sub-section (2) of section 52 can be invoked only where the consideration for the transfer has been understated by the assessee or, in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him and the burden of proving such an under-statement or concealment is on the revenue. This burden may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him and there is an understatement or concealment of the consideration in respect of the transfer. Sub-section (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him, and there is no concealment or suppression of the consideration." 19. Sub-section (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him, and there is no concealment or suppression of the consideration." 19. Similarly in the instant case, as we have already pointed out that the assessee is to ensure that there is no evasion of tax payable on the sale and purchase of goods, taking place in the State. It is with that view only the State Legislature has enacted the provision enabling the assessing authorities, if they are of the view that the price as stated in the accounts relating to a transaction does not reflect the prevailing market price and cannot be considered to be an honest and bona fide transaction and the price stated in the return is intended to evade sales tax which conclusion has to be arrived at on applying the basis or the norms specified in rule 18-C of the Rules, after affording an opportunity to the assessee and also after following the procedure prescribed for best judgment assessment, under sub-sections (2) to (5) of section 16 of the Act to assess or reassess the dealer as the case may be. A careful analysis of section 12-A of the Act discloses the following : The section only enables the assessing authority when that assessing authority is satisfied that the dealer has shown in his accounts, sales or purchase of goods with a view to evade the payment of tax at prices which are abnormally lower than the prevailing market rates at the relevant point of time. Therefore, it is clear that the assessing authority has to be first satisfied that the return submitted lacks bona fide. It is intended only to evade payment of tax. For the purpose of satisfying as to whether the return is not bona fide and is intended to evade payment of tax, the section further provides a criteria that the price mentioned about the sale and purchase transactions as shown in the accounts is abnormally lower than the prevailing marker price of such goods. Of course, the section does not state as to at what point of time the prevailing market price has to be taken into account. Of course, the section does not state as to at what point of time the prevailing market price has to be taken into account. Since the transaction in question in the return submitted relates to the assessment year in question, the prevailing market price of such goods should be in or around the date of transaction of sale and purchase as shown in the accounts. Necessarily, it follows that such prevailing market price cannot be of any other assessment year. It must be of the same assessment year and at the same time, it must have a proximity to the date of sale and purchase transactions as entered in the accounts of sales and purchase. It is only in such cases, the section gives power to the assessing authorities till the expiry of five years from the assessment year to which the return relates. Thereafter, the assessing authority has to give an opportunity to the dealer and hold an inquiry as he may consider necessary and decide. Sub-section (2) of section 12-A also lays down the procedure to be followed in such cases, viz., the procedure of best judgment assessment as contained in sub-sections (2) to (5) of section 16 of the Act. In addition to this, rule 18-C of the Rules also prescribes certain guidelines for the purpose of determining as to whether the price of sale or purchase of goods as entered in the accounts is really a consensual price. The contention is that the provision enables the authorities to re-determine the consensual price of the sale or purchase of goods, which does not lie within the legislative parameter of the State Legislature inasmuch as the sale of goods must be on a consensual price as per the provisions of the Sale of Goods Act, which law lies within the province of the Parliament. Therefore, it lies outside the legislative competency of the State Legislature. We must bear in mind that the dominant object of the law is to prevent the evasion of sales tax and to prevent the filing of such returns, which do not contain the real consensual price of goods sold or purchased. It is not for the purpose of determining the fresh contract of sale or purchase price of goods between the parties to the transaction. It is only intended to determine the taxable turnover of the dealer for the purpose of sales tax. It is not for the purpose of determining the fresh contract of sale or purchase price of goods between the parties to the transaction. It is only intended to determine the taxable turnover of the dealer for the purpose of sales tax. That being so, the provisions contained in section 12-A of the Act cannot at all be held to fall outside the purview of the State Legislature; in other words, outside the purview of article 246(3) read with entry 54 of List II of the Constitution. 20. We may also refer to the contention of the learned counsel that it is not open to the State Legislature to go into the adequacy or inadequacy of the consideration for sale or purchase of goods and that such adequacy or inadequacy of the consideration is not relevant for the purpose of determining the taxable turnover. In this regard, we may point out that this contention will hold good as long as the transactions of sale or purchase of goods as entered in the accounts are bona fide transactions. Once the authority is satisfied that the transactions are not bona fide, it is open to it to examine the returns in the light of the provisions contained in section 12-A of the Act, as long as such course is taken within 5 years from the expiry of the year to which the tax relates. 21. Regarding contention (4), we have already pointed out while analysing section 12-A of the Act that for invoking the said section, the condition precedent is that the assessing authority must be satisfied that the return is submitted only with a view to evade the payment of tax. 22. The decision of the High Court of Andhra Pradesh on which reliance was placed, viz., Delux Wines v. State of Andhra Pradesh [1990] 77 STC 373 has not been accepted by the learned single Judge. Further, the said decision has proceeded on the basis of the wordings contained in section 14-B of the Andhra Pradesh General Sales Tax Act, 1957 as amended by the Andhra Pradesh General Sales Tax (Amendment) Act (18 of 1985). The said section reads as follows : "Section 14-B : Assessment of sales shown in accounts at low prices. Further, the said decision has proceeded on the basis of the wordings contained in section 14-B of the Andhra Pradesh General Sales Tax Act, 1957 as amended by the Andhra Pradesh General Sales Tax (Amendment) Act (18 of 1985). The said section reads as follows : "Section 14-B : Assessment of sales shown in accounts at low prices. - (1) If the assessing authority is satisfied that a dealer has, with a view to evade the payment of tax, shown in his account sales or purchase of any goods at prices which are abnormally low compared to the prevailing market prices of such goods, it may, at any time within a period of four years from the date on which any order of assessment was served on the dealer, assess or reassess the dealer to the best of the judgment on the turnover of such sales or purchases after making such enquiry as may be necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. (2) The provisions of section 14 including penalty shall apply to assessment and reassessment of escaped turnover under this section." No doubt, substantially, section 14-B of the Andhra Pradesh Act is similar to section 12-A of the Act, but the learned Judges proceeded on the basis that the said section was vague and therefore, did not contain any guidelines and as a result thereof, it was likely to lead to arbitrary exercise of power. Therefore, until the guidelines are prescribed, the same could not be enforceable. It may be pointed out here that merely because there is likelihood of arbitrary exercise of the power under the provisions in the statute, it will not be a ground to declare such a provision as unconstitutional or unreasonable. Moreover, we find it very difficult to agree with the view of the Andhra Pradesh High Court even on the reading of section 14-B that it did not contain any guidelines. In fact, it did provide sufficient safeguards in the form of guidelines. Firstly, as per that section, the assessing authority was required to be satisfied that the return was not bona fide and it was intended to evade payment of tax. Secondly that the prices of sales or purchase of goods shown in the accounts were abnormally low compared to the prevailing market price of such goods. Firstly, as per that section, the assessing authority was required to be satisfied that the return was not bona fide and it was intended to evade payment of tax. Secondly that the prices of sales or purchase of goods shown in the accounts were abnormally low compared to the prevailing market price of such goods. Thirdly, it did provide for a best judgment procedure for determining the question as to whether the return submitted lacked bona fides and intended to evade the payment of tax. Therefore, we find it very difficult to agree with the view expressed by the High Court of the Andhra Pradesh in Delux Wines case [1990] 77 STC 373. 23. A Division Bench of the High Court of Rajasthan in P.N. Dhoot Investment Company Pvt. Ltd. v. State of Rajasthan [1993] 88 STC 25 considered the similar provisions contained in section 10(4-A) of the Rajasthan Sales Tax Act, 1954 and held that the proper way to construe the provision of the nature contained in a taxing statute is to see whether or not a transaction was a device to avoid tax and whether the transaction was such that the judicial process may accord approval to it. It was also further held that the provisions contained in section 10(4-A) of the Rajasthan Sales Tax Act could not be struck down on the ground that the same did not contain the guidelines when those guidelines were incorporated in the rules provided for that purpose, viz., rule 30-A of the Rajasthan Sales Tax Rules. It was also further held that the provisions did not suffer from unreasonableness or from the vice of arbitrariness attracting article 14 of the Constitution, that the provisions were incorporated to arrive at a real sale price of the goods sold as to facilitate the working of the provisions of the Sales Tax Act. They contained a procedure to compute the turnover of the assessee for the purpose of assessment under the provisions of the Sales Tax Act. Hence, we are of the view that section 12-A of the Act cannot be held to be either unreasonable or suffering from the vagueness, nor it would lead to any arbitrary exercise of the power. Similarly, it cannot be held that it lies beyond the power of the State Legislature as incorporated in article 246(3) read with entry 54, List II of the Act. 24. Similarly, it cannot be held that it lies beyond the power of the State Legislature as incorporated in article 246(3) read with entry 54, List II of the Act. 24. Rule 18-C : Rule 18-C reads thus : In making an assessment under section 12-A, the assessing authority shall take into account such of the following factors as may be relevant to the determination of the prevailing market price of the goods, namely :- (i) the prices charged by other dealers at the relevant stage of sale of similar goods during the relevant period; (ii) the difference between the price charged by the dealer on his sale and the price charged by the second and subsequent dealers on the sale of the same goods; (iii) the difference between the price paid by a dealer towards the purchase of the goods from the earlier seller and the price charged for the resale of the same goods; and (iv) the differential price charged on sales against bulk orders and small orders in respect of the same goods. If the difference in prices, exclusive of the sales tax element, is more than fifteen per cent, the assessing authority shall examine the reasons for the variations, taking into account the relationship between the parties to the transactions, the charge for after-sales services, packaging, transport and other expenses incurred by subsequent sellers which add to the cost of the goods at each stage of sale by successive dealers. The assessing authority shall also examine whether there is such difference in the price charged on the sales of the same goods to different customers and whether the goods are made available to all distributors or other customers in unlimited quantities and at the same prices. After making due allowance towards the variation in price and normal profit margin, the assessing authority shall arrive at the market price that should have been charged by the dealer and levy tax on the taxable value so arrived at." 25. The contention is that rule 18-C is ultra vires of the provisions contained in section 12-A of the Act, inasmuch as according to the learned counsel, as section 12-A does not authorise the manner of determination of the prevailing market rate whereas rule 18-C prescribes the fixation of market price, the said rule travels beyond the substantive provisions contained in section 12-A of the Act. From the very opening words of rule 18-C of the Rules, it is clear that the said rule is intended to guide the assessing authority to exercise the power under section 12-A of the Act. It is intended to provide the factors on the basis of which the power under section 12-A of the Act can be exercised. Thus, it is clear that the said rule in effect eliminates any scope for arbitrary exercise of power under section 12-A of the Act by prescribing the factors, which are to be applied for the purpose of determining the prevailing market price of the goods. We may point out here that while considering section 12-A of the Act, we have pointed out that the prevailing market price of such goods will be the market price, which would be very proximal in point of time to the sale or purchase transactions as entered in the accounts of sale or purchase of the dealer and that prevailing market price presumably has to be taken note of, for the purpose of determining whether the consensual price mentioned in the accounts relating to sale or purchase transaction was a real one or was only intended to evade payment of tax. By determining the real consensual price, the assessing authority or the statute or the rules providing a procedure for best judgment assessment will not be making a fresh contract of sale between the parties to the transaction. It will be only providing for determination of the real consensual price with a view to determine the actual and real turnover. Clauses (i) to (iv) of rule 18-C prescribes the factors to be taken note of while determining the real consensual price and not the market price as contended by learned counsel for the petitioners and the appellants. The four factors mentioned therein are the well-known factors for the purpose of determining the real consensual price. By following the same, the assessing authority can come to the real consensual price of sale or purchase of goods. We have already pointed out that before embarking upon such an exercise, the authority must be satisfied about the bona fide nature of the returns and for the purpose of determining whether the returns submitted were bona fide or not, the factors stated in section 12-A are to be taken into account. We have already pointed out that before embarking upon such an exercise, the authority must be satisfied about the bona fide nature of the returns and for the purpose of determining whether the returns submitted were bona fide or not, the factors stated in section 12-A are to be taken into account. It may also be borne in mind that sales tax relates to be commercial world and no person in the commercial world works without any gains. His main object is to make profit. As long as it is done within the four corners of law, there can be no objection by any one. It is only when he is greedy for making more money, the dealer tries to evade the payment of sales tax on the taxable turnover by submitting returns not representing the true consensual value of goods sold or purchased. The assessing authority is required to go deeper into the matter and determine as to whether the prices of goods mentioned in the accounts are true or not. These four factors enumerated in rule 18-C are based upon the long standing experience on the basis of which the commercial world functions. No dealer normally will sell his products or goods for a price lesser than the one prevailing in the market at the relevant point of time. Normally, the prices of similar type of goods will be, at a relevant point of time, more or less the same. If the difference of the price shown in the returns is abnormally low, it would definitely raise a doubt as to the bona fide nature of returns. Similarly, the subsequent purchaser in the normal course, does not sell the goods at a price lesser than the one at which he had purchased. These circumstances also are dependent upon the relationship between him and his seller and the price at which the second seller sold will also disclose that the transactions are intended to evade the payment of tax. These circumstances also are dependent upon the relationship between him and his seller and the price at which the second seller sold will also disclose that the transactions are intended to evade the payment of tax. The contention that rule 18-C does not at all mention the relevant point of time at which the prevailing market price has to be taken into account in determining the real consensual price of goods, therefore, the rule is bad, does not hold water, inasmuch as we have already pointed out that the prevailing market price cannot be the one, which is not proximal in point of time to the transaction in question. Therefore, we see no reason to accept such contention. The contention that if the difference in price excluding the sales tax is more than 15 per cent the assessing authority shall examine reasons for variation, is also not based upon any reason or logic. This contention also cannot be held to be valid. It may be mentioned here that 15 per cent difference is mentioned is clause (iv) only to provide a guiding factor for the purpose of determining whether the return submitted is bona fide or not and whether the said return represents the real consensual price. It is rather a limitation on the power of the assessing authority than causing prejudice to the dealer. If the difference is less than 15 per cent, it will not be possible for the assessing authority in the normal course to invoke the provisions contained in section 12-A of the Act. In addition to this, in certain cases, even if the difference is 15 per cent or more, it would depend upon the relationship of the parties to the transactions. 26. The questions similar to the one before us arose before the Supreme Court in K. P. Varghese v. Income-tax Officer, Ernakulam [1981] 131 ITR 597 wherein the validity of the provisions........contained in sub-section (2) of section 52 of the Income-tax Act, 1961 was considered. While dealing with the question of determination of the bona fide nature of the transaction, the Supreme Court observed thus : "But the question then arises, why has Parliament introduced the first condition as a pre-requisite for the applicability of sub-section (2) ? While dealing with the question of determination of the bona fide nature of the transaction, the Supreme Court observed thus : "But the question then arises, why has Parliament introduced the first condition as a pre-requisite for the applicability of sub-section (2) ? Why has Parliament provided that in order to attract the applicability of sub-section (2), the fair market value of the capital asset as on the date of the transfer should exceed by 15 per cent or more the full value of the consideration for the transfer declared by the assessee ? The answer is obvious. The object of imposing the condition of difference of 15 per cent or more between the fair market value of the capital asset and the consideration declared in respect of the transfer clearly is to save the assessee from the rigour of sub-section section (2) in marginal cases where difference in subjective valuation by different individuals may result in an apparent disparity between the fair market value and the declared consideration. It is a well-known fact borne out by practical experience that the determination of fair market value of a capital asset is generally a matter of estimate based to some extent on guess work and despite the utmost bona fides, the estimate of the fair market value is bound to vary from individual to individual. It is obvious that if the restrictive condition of a difference of 15 per cent or more between the fair market value of the capital asset as on the date of the transfer and the consideration declared in respect of the transfer were not provided in sub-section (2), many marginal cases would, having regard to the possibility of difference of opinion of subjective assessment of the fair market value, fall within the mischief of that sub-section and the statutory measure enacted in that sub-section for determining the consideration actually received by the assessee would be applicable in all its rigour in such cases. This condition of 15 per cent or more difference is merely intended to be a safeguard against the undue hardship which would be occasioned to the assessee if the inflexible rule of thumb enacted in sub-section (2) were applied in marginal cases and it has nothing to do with the question of burden of proof, for, the burden of establishing that there is an understatement of the consideration in respect of the transfer always rests on the revenue. The postulate underlying sub-section (2) is that the difference between one honest valuation and another may range up to 15 per cent and that constitutes the class of marginal cases which are taken out of the purview of sub-section (2) in order to avoid hardship to the assessee. It is, therefore, clear that sub-section (2) cannot be invoked by the revenue unless there is understatement of the consideration in respect of the transfer and the burden of showing that there is such understatement is on the revenue. Once it is established by the revenue that the consideration for the transfer has been understated or, to put it differently, the consideration actually received by the assessee is more than what is declared or disclosed by him, sub-section (2) is immediately attracted, subject of course to the fulfilment of the condition of 15 per cent or more difference, and the revenue is then not required to show what is the precise extent of the understatement or in other words, what is the consideration actually received by the assessee. That would in most cases be difficult, if not impossible, to show and hence sub-section (2) relieves the revenue of all burden of proof regarding the extent of understatement or concealment and provides a statutory measure of the consideration received in respect of the transfer. It does not create any fictional receipt. It does not deem as receipt something which is not in fact received. It merely provides a statutory best judgment assessment of the consideration actually received by the assessee and brings to tax capital gains on the footing that the fair market value of the capital asset represents the actual consideration received by the assessee as against the consideration untruly declared or disclosed by him. This approach in the construction of sub-section (2) falls in line with the scheme of the provisions relating to tax on capital gains. This approach in the construction of sub-section (2) falls in line with the scheme of the provisions relating to tax on capital gains. It may be noted that section 52 is not a charging section but is a computation section. It has to be read along with section 48 which provides the mode of computation and under which the starting point of computation is 'the full value of the consideration received or accruing'. What in fact never accrued or was never received cannot be computed as capital gains under section 48. Therefore, sub-section (2) cannot be construed as bringing within the computation of capital gains an amount which, by no stretch of imagination, can be said to have accrued to the assessee or been received by him and it must be confined to cases where the actual consideration received for the transfer is understated and since in such cases it is very difficult, if not impossible, to determine and prove the exact quantum of the suppressed consideration, sub-section (2) provides the statutory measure for determining the consideration actually received by the assessee and permits the revenue to take the fair market value of the capital asset as the full value of the consideration received in respect of the transfer. This construction which we are placing on sub-section (2) also marches in step with the Gift-tax Act, 1958. If a capital asset is transferred for a consideration below its market value, the difference between the market value and the full value of the consideration received in respect of the transfer would amount to a gift liable to tax under the Gift-tax Act, 1958, but if the construction of sub-section (2) contended for on behalf of the revenue were accepted, such difference would also be liable to be added as part of capital gains taxable under the provisions of the Income-tax Act, 1961. This would be an anomalous result which could never have been contemplated by the Legislature, since the Income-tax Act, 1961, and the Gift-tax Act, 1958, are parts of an integrated scheme of taxation and the same amount which is chargeable as gift could not be intended to be charged also as capital gains. This would be an anomalous result which could never have been contemplated by the Legislature, since the Income-tax Act, 1961, and the Gift-tax Act, 1958, are parts of an integrated scheme of taxation and the same amount which is chargeable as gift could not be intended to be charged also as capital gains. Moreover, if sub-section (2) is literally construed as applying even to cases where the full value of the consideration in respect of the transfer is correctly declared or disclosed by the assessee and there is no understatement of the consideration, it would result in amount being taxed which has neither accrued to the assessee nor been received by him and which from no view-points can be rationally considered as capital gains or any other type of income. It is a well-settled rule of interpretation that the court should as far as possible avoid that construction which attributes irrationality to the Legislature. Besides, under entry 82 in List I of the Seventh Schedule to the Constitution, which deals with 'Taxes on income other than agricultural income' and under which the Income-tax Act, 1961, has been enacted, Parliament cannot choose to tax as income an item which in no rational sense can be regarded as a citizen's income or even receipt. Sub-section (2) would, therefore, on the construction of the revenue, go outside the legislative power of Parliament and it would not be possible to justify it even as an incidental or ancillary provision or a provision intended to prevent evasion of tax. Sub-section (2) would also be violative of the fundamental right of the assessee under article 19(1)(f) - which fundamental right was in existence at the time when sub-section (2) came to be enacted - since on the construction canvassed on behalf of the revenue, the effect of sub-section (2) would be to penalise the assessee for transferring his capital asset for a consideration lesser by 15 per cent or more than the fair market value and that would constitute unreasonable restriction on the fundamental right of the assessee to dispose of his capital asset at the price of his choice. The court must obviously prefer a construction which renders the statutory provision constitutionally valid rather than that which makes it void". The court must obviously prefer a construction which renders the statutory provision constitutionally valid rather than that which makes it void". Therefore, we are of the view that rule 18-C is intended to provide guidelines to the assessing authority to determine the real consensual price and not to determine the prevailing market price. The prevailing market price is only taken as one of the factors for determining the real consensual value of the sale or purchase of the goods. Hence, we are of the view that rule 18-C of the Rules is not ultra vires the provisions contained in section 12-A of the Act. Accordingly, rule 18-C of the Rules is held valid. 27. As a result of holding that section 12-A of the Act and rule 18-C of the Rules are valid and are intended only to determine the real consensual value of the goods sold or purchased as entered in the accounts submitted in the returns and have provided a machinery and also the guideline to the assessing authority to satisfy itself as to whether the returns submitted by the assessee are bona fide and are not intended to evade payment of tax, the writ appeals and writ petitions are liable to be dismissed. However, in some of the writ petitions, assessment orders are challenged and in others, notice of assessment is challenged. We are of the view that in the interests of justice, it is just and necessary to provide an opportunity to the assessee to file objections to the notices and to prefer appeals against the assessment orders. We, accordingly, issue while dismissing the writ appeals and writ petitions, the following directions : Such of the petitioners who have invoked the jurisdiction of this Court under article 226 of the Constitution against the notices issued for assessment and such of those who have challenged the orders of assessment, are given time till January 15, 1996 to file objections to the show cause notices or to prefer appeals against the orders of assessments, as the case may be. In such an event, the assessing authorities and the appellate authorities shall consider the objection and the appeals, without going into the question of limitation. In such an event, the assessing authorities and the appellate authorities shall consider the objection and the appeals, without going into the question of limitation. The assessments shall be finalised and the appeals shall be decided in the light of the observations made and the interpretation placed in this judgment on section 12-A of the Act and rule 18-C of the Rules. However, we make no order as to costs. The W.M.Ps. are also disposed of. 28. We may also point out that while determining the real consensual price, when compared with the prevailing market price, the price at which similar goods are sold by the retailers and the price at which the goods are sold by wholesalers, cannot be the comparable price for the purpose of determining the real consensual price of the wholesaler. Similarly, the price at which the wholesaler has sold the goods shall not also be the prevailing market price for the purpose of determining the real consensual price of the retail seller. Writ appeals and petitions dismissed.