Judgment : Common question arises in these Writ Petitions and they are disposed of by a common Judgment. 2. Petitioners call in question the constitutionality of Section 44(10) of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as the Act). Petitioners have been visited with orders imposing penalty under Section 44(8) of the Act. It is, at once, necessary to extract the aforesaid provisions: "44. Power to order production of accounts and powers of entry, inspection etc. - (8) If any Officer, while inspecting any place of business under sub-section (2) or searching any place under sub-section(3) finds therein any goods not accounted for by the dealer in his accounts and other records required under Section 40 to be kept and maintained by him such Officer may, after giving the dealer a reasonable opportunity of being heard, by order, direct the payment of a penalty, not exceeding fifty per cent of the value of the goods not accounted for, as may be fixed by such Officer. (10) If any Officer, in the course of any inspection or search of any business place, building or any other place finds that goods are stored in undeclared godown, such stock shall be treated as stock outside the regular books of accounts of the dealer; Provided, that godowns in respect of which prior written intimation had been given to the registering authority by the dealer shall not be treated as undeclared godowns." It is also necessary to refer to Sections 44(2) and (3) of the Act. They read as follows: "44. Power to order production of accounts and powers of entry, inspection etc. – (2) Any Officer, not below the rank of an assessing authority may - (a) enter any place of business; and (b) inspect any accounts, registers, records or other documents relating to his business and the goods in his possession. They read as follows: "44. Power to order production of accounts and powers of entry, inspection etc. – (2) Any Officer, not below the rank of an assessing authority may - (a) enter any place of business; and (b) inspect any accounts, registers, records or other documents relating to his business and the goods in his possession. (3) If any Officer not below the rank of an assessing authority has reason to believe that a dealer is trying to evade any tax under this Act, he may, for reasons to be recorded, enter and search, - (a) the place of business of the dealer ; or (b) any other place where the dealer is keeping or is reasonably suspected to be keeping any goods, accounts, registers, records or other documents relating to his business: Provided that no residential accommodation (not being a shop-cum-residence) shall be entered into or searched unless such Officer is specially authorized in writing by the Commissioner to search that accommodation. Explanation.- For the purposes of clause (b) "place" includes any godown, building, vessel, box or receptacle." 3. Inspections were conducted at the petitioners godowns which were found to be undeclared within the meaning of Section 44(10) of the Act. Recourse was taken to the power under Section 44(8) and penalty has been imposed at the maximum rate which is fifty per cent of the value of the goods. 4. I heard Shri V.P. Sukumar, learned counsel appearing for the petitioners and Shri C.K. Govindan, learned Government Pleader. 5. Learned counsel for the petitioners would submit that assistance cannot be drawn from Section 44 (10) of the Act for the purpose of invoking the power under Section 44(8). In other words, it is firstly contended that while it may be open to the Authority to invoke Section 67 of the Act and impose penalty thereunder for any transgression as would arise from flouting the law, it is impermissible for the Authority to invoke Section 44 (8) of the Act on the strength of the goods being found at an undeclared godown. It is pointed out that Section 44(8) provides for imposition of penalty. It has penal consequences. It may be true that Section 44(10) provides for a presumption that the goods found at an undeclared godown are to be treated as not being accounted. It is nothing more, nor nothing less. It is pointed out that Section 44(8) provides for imposition of penalty. It has penal consequences. It may be true that Section 44(10) provides for a presumption that the goods found at an undeclared godown are to be treated as not being accounted. It is nothing more, nor nothing less. There is no scope for extending the purport of Section 44(10) further and to read it in conjunction with the power under Section 44(8), it is contended. It is further contended that the goods are all accounted. It so happened that they were located in the godowns which are undeclared. However, it is complained that penalty has been imposed at the maximum rate, namely at fifty per cent of the value of the goods which comes to a huge amount. It is contended that if it is to be treated as the law that in respect of goods found at an undeclared godown, there is to be no discretion in the matter of imposition of penalty and invariably, irrespective of circumstances including whether the goods are accounted otherwise, assuming that Sections 44(8) and (10) are to be read together and power under Section 44(8) can be invoked in cases covered by Section 44(10), Section 44 (10) is clearly unconstitutional. In this connection, learned counsel for the petitioners sought to draw assistance from the following decisions: (1) Suraj Mall Mohta And Company v. A.V. Visvanatha Sastri And Another (AIR 1954 SC 545). (2) Kunnathat Thathunni Moopil Nair v. State of Kerala (AIR 1961 SC 552). (3) St. Michaels Oil Mills v. State of Kerala ((1988) 68 STC 360). (4) B. Ganesha Krishna Bhat v. State of Kerala And Another ((1989) 73 STC 267 (Kar.). (5) Commissioner of Income Tax (Central), Calcutta v. Moon Mills Ltd. (AIR 1966 SC 870). 6. Learned counsel for the petitioners contended that the purport of Section 44(10) is merely to raise a presumption that the goods found at the undeclared godown are to be treated as unaccounted and the presumption or the fiction stops there. He contended that when a fiction is created by provisions of law, it cannot be extended beyond its true scope. In this regard, he relied on the decision of the Apex Court in Commissioner of Income Tax (Central), Calcutta v. Moon Mills Ltd. (AIR 1966 SC 870). It is necessary to notice the short facts. He contended that when a fiction is created by provisions of law, it cannot be extended beyond its true scope. In this regard, he relied on the decision of the Apex Court in Commissioner of Income Tax (Central), Calcutta v. Moon Mills Ltd. (AIR 1966 SC 870). It is necessary to notice the short facts. The assets of the respondent Company had been insured. The Company received Rs.65 Lakhs on 27th March, 1950 as compensation for loss due to a fire. The Income Tax Officer took the view that the same is to be included as taxable income for the assessment year 1949 - 1950 as the amount had become receivable on 13th December, 1948. The Appellate Assistant Commissioner, the Income Tax Tribunal and the High Court on a reference, took the view that it could be assessed to tax only when the Company actually received it. The Revenue appealed the decision. It is necessary to refer to the proviso to Section 10(2) of the Income Tax Act, 1922 which reads as under: "Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant which has been discarded or demolished or destroyed, and the amount of such moneys does not exceed the written down value, the amount allowable under this Clause shall be the amount, if any, by which the difference between the written down value and the scrap value exceeds the amount of such moneys: Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant as aforesaid, and the amount of such moneys exceeds the difference between the written down value and the scrap value, no amount shall be allowable under this Clause and so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value, shall be deemed to be profits of the previous year in which such moneys were received......The proviso, therefore, introduces a fiction. What is not a profit in the previous year is deemed to be a profit in that year. The previous year is that year in which such moneys were received. The fiction is an indivisible one. What is not a profit in the previous year is deemed to be a profit in that year. The previous year is that year in which such moneys were received. The fiction is an indivisible one. It cannot be enlarged by importing another fiction, namely, that if an amount was receivable during the previous year, it must be deemed to have been received during that year. In dealing with the scope of the fiction in S.10(2) (vii), proviso 2, this Court in Commissioner of Income-tax, Madras v. Ajax Products Ltd., 1965-55 ITR 741 at pp. 748, 751: (AIR 1965 SC 1358 at pp.1362-1363) observed: Though the surplus contemplated by the proviso is not in the technical sense of the term profits of the previous year, it is deemed to be the profits of the previous year." (9) The same idea is developed thus: The fiction in the second proviso is a limited one. The surplus is deemed to be the profits of the previous year. As we have pointed out earlier, it adequately serves the purpose of the Section. To sustain the argument of the revenue, it has to be enlarged in its scope. Many words have to be read into it which are not there. We cannot accept this argument." 7. I feel that the decision of the Apex Court is clearly distinguishable. As the Apex Court observed, it would have required the addition of many words to produce the result which the Revenue canvassed. When the proviso contemplated the amount being received, it was noted that re-writing of the proviso to import the concepts apposite to the mercantile system of accounting and transform the word "received" to the word "receivable" was necessary to sustain the case of the Revenue. It is to be noted that as far as Section 44(10) is concerned, it is in the first place added by way of an amendment and by the amendment it is not irrelevant to notice that it has been added as part of Section 44. Further, more and more significantly, there are clear indications in the wording of Section 44(10) to indicate that the legislature intended that penal consequences emanating from the power conferred under Section 44(8) were to apply in the case of an undeclared godown. Section 44(8) clearly contemplates power to impose penalty in a situation where goods are found not to have been accounted. Section 44(8) clearly contemplates power to impose penalty in a situation where goods are found not to have been accounted. The menace of the tax evasion is one which is constantly engaging the attention of the law giver. Apparently, it found that goods were being stored in many cases at places which were not declared to the Authorities. The law provides for the assessee to intimate their place of stocking the goods (godowns) and it being entered in the Certificate of Registration. The law also contemplates inspections being conducted from time to time, with a view to unearth cases of tax evasion. If the assessee is permitted to escape with impunity, the requirement that they should declare the place at which the goods are stocked, it is not difficult to imagine that there could be large scale evasion of taxes by not accounting those goods. This is clearly a public mischief which has the effect of a State losing its legitimate income by way of tax under the Act. It is also important to notice that Section 44 (8) also speaks about the power to impose penalty when goods are found to be unaccounted. The language of Section 44(10) is clearly patterned on the core and indispensable requirement to be found in Section 44(8) as well. The mere fact that Section 44 (10) is not added by way of either of an Explanation to Section 44(8) or as a Proviso would not, in my view, militate against its functional integrity being interwoven with the power under Section 44(8). The legislature by Section 44(10) apparently intended to deal firmly with the phenomenon of tax evasion being practised by stacking away the goods at undisclosed places, the assessee intending to put it beyond the scrutiny of the official. I do not think it requires any uncalled for straining of the language or torturing out of shape of the provisions to produce the result which the Learned Government Pleader commends for my acceptance. A reference to sub-section (8) would also reveal that the word "place" as it is contemplated in Section 44(3) also includes godown. Search can be conducted at any other place other than the place of business of the dealer. A reference to sub-section (8) would also reveal that the word "place" as it is contemplated in Section 44(3) also includes godown. Search can be conducted at any other place other than the place of business of the dealer. There can be no doubting the fact that when the assessee stores his goods at an undisclosed location, normally and generally, he intends to place the veil of secrecy over his transactions and it makes the already vexed problem of tax evasion, even more intractable. The legislature which knows the felt necessities of the times, has declared it to be so. It may not be apposite for the Court under our constitutional scheme of things to veto the will of the people expressed through the legislative device unless the petitioners succeed, no doubt, in establishing that the law cannot pass-muster on the anvil of any of the fundamental freedoms or any other ground available. It is true that Section 67 of the Act provides for levy of penalty in various situations. It is necessary to Section 67(1) of the Act which reads as follows: "67. It is true that Section 67 of the Act provides for levy of penalty in various situations. It is necessary to Section 67(1) of the Act which reads as follows: "67. Imposition of penalty by authorities.- (1) Notwithstanding anything contained in Section 71, if any authority empowered under this Act, is satisfied that any person.- (a) being a person required to register himself as a dealer under this Act, did not get himself registered; or (b) has failed to keep true and complete accounts; or .(c) has failed to submit any return as required by the provisions of this Act or the rules made thereunder; or .(d) has submitted an untrue or incorrect return; or .(e) has made any bogus claim of input tax credit, special rebate or refund; or .(f) has continued the business during the period of suspension of registration; or .(g) has failed to return the unused statutory Forms and Declarations under this Act after the cancellation or suspension of the registration; or .(h) has not stopped any vehicle or vessel when required to do so; or .(i) has failed to comply with all or any of the terms of any notice or summons issued to him by or under the provisions of this Act or the rules made thereunder; or .(j) has acted in contravention of any of the provisions of this Act or any rule made thereunder for the contravention of which no express provisions for payment of penalty or for punishment is made by this Act; or .(k) has abetted the commission of the above offences; or .(l) has abetted or induced in any manner another person to make and deliver any return or an account or a statement or declaration under this Act or rules made thereunder, which is false and which he either knows to be false or does not believe to be true, such authority may direct that such person shall pay, by way of penalty, an amount not exceeding twice the amount of tax or other amount evaded or sought to be evaded where it is practicable to quantify the evasion or an amount not exceeding Ten thousand rupees in any other case. Provided that the authority empowered under this Section shall dispose of the case within one year from the date of detection of offence mentioned under this Section except where the extension of time is granted by the Deputy Commissioner." 8. Having regard to the scheme of the Act, the context and the purpose, the public mischief that was intended to be dealt with as also the location of the provision in question, I see no reason to agree with the learned counsel for the petitioners that there is no power to impose penalty under Section 44(8) upto a maximum of fifty per cent of the value of the goods in a case where the goods are located in an undisclosed godown. I do not see how the provisions of Section 44(8) become inapplicable, merely on account of the provisions of Section 67. 9. The further question which is posed before me is as regards the constitutionality of the provision. Learned counsel for the petitioners contended that a right of Appeal is created under the Act. If in a case, even assuming that the power under Section 44(8) can be invoked on the basis of Section 44 (10), if penalty is to be imposed at the maximum rate, then the right of Appeal is rendered illusory, as no purpose would be served by appealing the decision. He would submit that the goods have been accounted and it is only for certain reasons that the goods happened to be located in the places where they were found in the inspections. In Kunnathat Thathunni Moopil Nair v. State of Kerala (AIR 1961 SC 552), the Apex Court was concerned with the challenge to the constitutionality of the Travancore – Cochin Land Tax Act, 1955 as amended by the Land Tax (Amendment) Act of 1957. Essentially, the challenge was upheld on the ground of the offending provisions being violative of Article 14 of the Constitution as also Article 19(1)(f). In the course of the Judgment, it was held as follows: "The whole thing, from beginning to end, is treated as of a purely administrative character, completely ignoring the legal position that the assessment of a tax on person or property is at least of a quasi-judicial character. In the course of the Judgment, it was held as follows: "The whole thing, from beginning to end, is treated as of a purely administrative character, completely ignoring the legal position that the assessment of a tax on person or property is at least of a quasi-judicial character. Again, the Act does not impose an obligation on the Government to undertake survey proceedings within any prescribed or ascertainable period, with the result that a land-holder may be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax thus assessed. Though the Act was passed about five years ago we were informed at the Bar that survey proceedings had not even commenced. The Act thus proposes to impose a liability on land-holders to pay a tax which is not to be levied on a judicial basis, because (1) the procedure to be adopted does not require a notice to be given to the proposed assessee; (2) there is no procedure for rectification of mistakes committed by the Assessing Authority; (3) there is no procedure prescribed for obtaining the opinion of a superior Civil Court on questions of law, as is generally found in all taxing statutes, and (4) no duty is cast upon the Assessing Authority to act judicially in the matter of assessment proceedings. Nor, is there any right of appeal provided to such assessees as may feel aggrieved by the order of assessment. That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face. Taking the extreme case, the facts of which we have stated in the early part of this Judgment, it can be illustrated that the provisions of the Act, without proposing to acquire the privately owned forests in the State of Kerala after satisfying the conditions laid down in Art. 31 of the Constitution, have the effect of eliminating the private owners through the machinery of the Act. The petitioner in petition 42 of 1958 has been assumed to own 25 thousand acres of forest land. The liability under the Act would thus amount to Rs.50,000/= a year, as already demanded from the petitioner on the basis of the provisional assessment under the provisions of S.5(A). The petitioner is making an income of Rs.3,100/= per year out of the forests. The liability under the Act would thus amount to Rs.50,000/= a year, as already demanded from the petitioner on the basis of the provisional assessment under the provisions of S.5(A). The petitioner is making an income of Rs.3,100/= per year out of the forests. Besides, the liability of Rs.50,000/= as aforesaid, the petitioner has to pay a levy of Rs.4,000/= on the surveyed portions of the said forest. Hence, his liability for taxation in respect of his forest land amounts to Rs.54,000/= whereas his annual income for the time being is only Rs.3,100/= without making any deductions for expenses of management. Unless the petitioner is very enamoured of the property and of the right to hold it may be assumed that he will not be in a position to pay the deficit of about Rs.51,000/= every year in respect of the forests in his possession. The legal consequences of his making a default in the payment of the aforesaid sum of money will be that the money will be realised by the coercive processes of law. One can, easily imagine that the property may be sold at auction and may not fetch even the amount for the realisation of which it may be proposed to be sold at public auction. In the absence of a bidder forthcoming to bid for the offset amount, the State ordinarily becomes the auction purchaser for the realisation of the outstanding taxes. It is clear, therefore, that apart from being discriminatory and imposing unreasonable restrictions on holding property, the Act is clearly confiscatory in character and effect. It is not even necessary to tear the veil, as was suggested in the course of the argument, to arrive at the conclusion that the Act has that unconstitutional effect. For these reasons, as also for the reasons for which the provisions of ss.4 and 7 have been declared to be unconstitutional, in view of the provisions of Art. 14 of the Constitution, all these operative sections of the Act, namely 4, 5A and 7, must be held to offend Art.19(1)(f) of the Constitution also. The petitions are accordingly allowed with costs against the contesting respondent, the State of Kerala." 10. It is to be noted that admittedly, the petitioners have a right of Appeal as against the orders imposing penalty under Section 44(8) of the Act. The petitions are accordingly allowed with costs against the contesting respondent, the State of Kerala." 10. It is to be noted that admittedly, the petitioners have a right of Appeal as against the orders imposing penalty under Section 44(8) of the Act. Thus, it cannot be said that there is no right of Appeal. It is most crucial also to notice that opprobrium of Section 44(8) can be circumvented by merely intimating the Authority about the godown which is not yet entered in the Certificate of Registration. In other words, this provision allows a bonafide assessee who intends to store goods in a place which is not yet permitted to him in terms of the Certificate of Registration, to merely intimate the Authority about the place. Thus, all bonafide assessees who do not intend to scree the goods from the purview of the Authorities are immune from the net of the provisions contained in Section 44(10) read with Section 44(8). If the assessee is not even prepared to intimate the location where he is storing the goods which is not a declared godown, then, he cannot be heard to urge that the provision is arbitrary or unreasonable. As already noticed, allowing stacking of goods in undisclosed locations, effectively curbs the powers of the Authorities to collect the revenue due to the State. The proviso in Section 44(10) is a safe-guard against it being enforced against honest assessees. 11. No doubt, in St. Michaels Oil Mills v. State of Kerala (68) STC 360), the question arose under Section 28(8) of the KGST Act, 1963. It corresponds to Section 44(8) of the Act. Therein, the Court has held as follows: "4. We see force in the said plea. The first respondent-Intelligence Officer is a quasi-judicial authority. Penalty proceeding is a quasi-criminal proceeding in character. In imposing the penalty under Section 28(8) of the Act, the Officer has to act judicially. He should act fairly and in accordance with the principles of natural justice. He is duty bound to apply his mind to the facts of the case. He cannot arbitrarily or mechanically. The Section states that the maximum penalty leviable is 50 per cent of the value of the unaccounted stock. The language employed in section 28 (8) of the Act itself shows that the levy of penalty is permissive and not compulsive. He is duty bound to apply his mind to the facts of the case. He cannot arbitrarily or mechanically. The Section states that the maximum penalty leviable is 50 per cent of the value of the unaccounted stock. The language employed in section 28 (8) of the Act itself shows that the levy of penalty is permissive and not compulsive. The Officer should exercise his discretion and apply his mind to the facts of each case. He should be first of all satisfied that penalty is exigible. Even so, he has to further apply his mind judicially and fix the quantum of penalty to be imposed. There are thus two different stages of aspects in the matter. The mere fact that Section 28(8) of the Act permits the levy of 50 per cent of the value of the unaccounted stock as penalty, does not mean that the Officer can and should impose 50 per cent of the value of the unaccounted stock as penalty in all cases." In Suraj Mall Mohta & Co. v. A. Viswanatha Sastri & Another (AIR 1954 SC 545), the Apex Court took the view that certain provisions of the Taxation on Income (Investigation Commission) Act, 1947 were violative of Article 14 of the Constitution. It took the view that the procedure prescribed by the impugned Act was substantially prejudicial to the assessee and it is violative of Article 14 of the Constitution. It held as follows: "2. When an assessment on escaped or evaded income is made under the provisions of Section 34 of the Indian Income-tax Act, all the provisions for arriving at the assessment provided under Section 23(3) come into operation and the assessment has to be made on all relevant materials and on evidence and the assessee ordinarily has the fullest right to inspect the record and all documents and materials that are to be used against him. Under the provisions of Section 37 of the Indian Income-tax Act the proceedings before the Income-tax Officer are judicial proceedings and all the incidents of such judicial proceedings have to be observed before the result is arrived at. In other words, the assessee would have a right to inspect the record and all relevant documents before he is called upon to lead evidence in rebuttal. In other words, the assessee would have a right to inspect the record and all relevant documents before he is called upon to lead evidence in rebuttal. This right has not been taken away by any express provisions of the income-tax Act, but the impugned Act contains a mandate in sub-section (4) of Section 7 to the effect that "no person shall be entitled to inspect, call for, or obtain copies of, any documents, statement or papers or materials furnished to, obtained by or produced before the Commission or any authorized official in any proceedings under this Act." There is a proviso to subsection (4) which sways that for the purpose of enabling the person whose case or points in whose case is or are being investigated to rebut any evidence brought on the record against him, he shall, on application made in this behalf and on payment of such fees as may be prescribed by rules, be furnished with certified copies of documents, statements, papers and materials brought on the record by the Commission. This little, mercy shown to the person whose case is being investigated by the Commission is no substitute for he fullest right of inspection which under ordinary law and the Code of Civil Procedure and in a judicial proceeding a person would have in order to meet the case made against him. He is entitled only to get copies of that portion of the materials which is brought on the record and which is going to be used against him and it is clear that portions of the material which are in his favour and which have not been brought on the record may not be available to him at all. He is not even entitled to see all the books of account which may have been impounded under the Act and taken possession of by the Commission. It may well happen that there are entries in those books which contain the rebuttal evidence, but the assessee is not entitled to have their copies. The assessee is not even entitled to see his own books which are in the possession of the Commission and take copies of those entries which are favourable to him and which would completely demolish the case made against the assessee by the Commission. The assessee is not even entitled to see his own books which are in the possession of the Commission and take copies of those entries which are favourable to him and which would completely demolish the case made against the assessee by the Commission. The procedure thus prescribed in this matter by the impugned Act is substantially prejudicial to the assessee than the procedure prescribed under the Indian Income-tax Act. It was not disputed by the learned Solicitor-General that the procedure prescribed by the impugned Act in Sections 6 and 7 was more drastic than the procedure prescribed in sections 37 and 38 of the Indian Income-tax Act. Again, so far as the procedure for reference under sub-section (4) of Section 5 is concerned, it is also to a certain extent prejudicial to the assessee. There is no doubt that there is in this matter in the first stages some similarity in the procedure to be followed for catching evaded income both under section 34 of the Indian Income-tax Act and under the provisions of sub-section (4) of Section 5 of the impugned Act, but the overall picture is that though under the Indian Income-tax Act the same Officer who first arrives at a tentative conclusion hears and decides the case, his decision is not final, but is subject to appeal, while under the provisions of sub-section (4) of Section 5, the decision of the Commission tentatively arrived at in the absence of the assessee becomes final when taken in his presence, and that makes all the difference between the two procedures. If there was a provision for reviewing the conclusions of the Investigation Commission when acting both as investigators and judges, there might not have been such substantial discrimination in the two procedures as would bring the case within Article 14; but as pointed out above, there is no provision of that kind in the impugned Act." 12. Learned Government Pleader relied on the decision of the Apex Court in Government of Andhra Pradesh And Others v. P. Laxmi Devi (2008 (4) SCC 720). Therein, the Court was concerned with the validity of Section 47A of the Indian Stamp Act as amended by the Andhra Pradesh Act 8 of 1988 which required deposit of fifty per cent deficit stamp duty for reference to the Collector under Section 47A. Therein, the Court, inter alia, held as follows: "68. Therein, the Court was concerned with the validity of Section 47A of the Indian Stamp Act as amended by the Andhra Pradesh Act 8 of 1988 which required deposit of fifty per cent deficit stamp duty for reference to the Collector under Section 47A. Therein, the Court, inter alia, held as follows: "68. As regards fiscal or tax measures greater latitude is given to such statutes than to other statutes. Thus in the Constitution Bench decision of this Court in R.K. Garg v. Union of India and others 1981 Indian SC 372 (vide para 8) this Court observed: Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in morey v. Doud where Frankfurter, J. said in his inimitable style: In the utilities, tax and economic regulation cases, there are good reasons for judicial self- restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the Judges have been overruled by events `self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the Judges have been overruled by events `self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. The Court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry"; "that exact wisdom and nice adaptation of remedy are not always possible" and that "judgment is largely a prophecy based on meagre and uninterrupted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what may one call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Relg. Refining Company, be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities or abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. 94. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. 94. Inview of the fact that the impugned amendment is an economic measure, whose aim is to plug the loopholes and secure speedy realization of stamp duty, we are of the opinion that the said amendment, being an economic measure, cannot be said to be unconstitutional." 13. Learned Government Pleader also drew support from the decision of the Apex Court in Assistant Commercial Taxes Officer v. Bajaj Electricals Limited (2008 (18) VST 436). Therein, the Court, inter alia, was concerned with the question whether Section 78(5) of the Rajasthan Sales Tax Act, 1994 required the proving of intention or mens rea. A truck coming from Delhi was intercepted. The Officer took the view that the goods were imported without the Declaration Form ST 18A which amounted to violation of Section 78(2)(a) of the Act and penalty at the rate of thirty per cent was imposed on the price of the goods. the Court held, inter alia, as follows: "26. We are not concerned with non-filing of statements before the A.O. We are concerned with the goods in movement being carried without supporting declaration forms. The object behind enactment of Section 78(5) which gives no discretion to the competent authority in the matter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to the State a remedy for the loss of revenue. The object behind enactment of Section 78(5) is to emphasise loss of revenue and to provide a remedy for such loss. It is not the object of the said Section to punish the offender for having committed an economic offence and to deter him from committing such offences. The penalty imposed under the said Section 78(5) is a civil liability. Willful consignment is not an essential ingredient for attracting the civil liability as in the case of prosecution. Section 78(2) is a mandatory provision. If the declaration form 18A/18C does not support the goods in movement because it is left blank then in that event Section 78(5) provides for imposition of monetary penalty for non- compliance. 27. Willful consignment is not an essential ingredient for attracting the civil liability as in the case of prosecution. Section 78(2) is a mandatory provision. If the declaration form 18A/18C does not support the goods in movement because it is left blank then in that event Section 78(5) provides for imposition of monetary penalty for non- compliance. 27. Default or failure to comply with Section 78(2) is the failure/default of statutory civil obligation and proceedings under Section 78 (5) is neither criminal nor quasi-criminal in nature. The penalty is for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty under Section 78(5) is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant." (emphasis supplied) The decision of a learned Single Judge of the Bombay High Court in Navnitial K. Zaveri v. K.K. Sen, Appellate Assistant Commissioner of Income Tax, D-Range, Bombay (1962 Indlaw Mum 61), is relied on for the following propositions by the respondent: "If it acts equally on all persons similarly situated, then the legislation cannot be treated as violative of Article 14 of the Constitution by reason of any subsequent happening or event.........But, merely because it works hardship on some persons on whom the legislation acts, it cannot be said to be violative of Article 14 of the Constitution." Learned Government Pleader also relied on the decision of the Apex Court in Ashok Leyland Limited v. State of Tamil Nadu and Another ((2004) 3 SCC 1). Therein, the Court dealing with the question of the purpose and object of a legal fiction, held as follows: "71. In Bhavnagar University v. Palitana Sugar Mill (P) Ltd. (2002 Indlaw SC 1454 at p.123), it was stated that the purpose and object of creating a legal fiction in the statute is well known. But, when a legal fiction is created, it must be given its full effect. It was held in East End Dwellnes Co. In Bhavnagar University v. Palitana Sugar Mill (P) Ltd. (2002 Indlaw SC 1454 at p.123), it was stated that the purpose and object of creating a legal fiction in the statute is well known. But, when a legal fiction is created, it must be given its full effect. It was held in East End Dwellnes Co. Ltd. v. Finsbury Borough Council (1951 Indlaw HL3): "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs." (See also ITW Signode India Ltd. v. Collector of General Excise - 2003(9) SCALE 720 - para 58). 72. These decisions, therefor, show that whenever a legal fiction is created by a statute, the same shall be given full effect." 14. I am of the firm view that it is not open to the petitioners to assail the validity of Section 44(10). No compelling reasons have been made out to declare Section 44 (10) as unconstitutional. It is part of a fiscal statute, an economic measure. Apparently, the legislature has deemed it fit to deal with a serious problem of rampant tax evasion practised through the medium of undisclosed godowns, thus resulting in better compliance. 15. However, it is necessary to observe that it is certainly not the law that in every case where goods are discovered at undisclosed godowns, the penalty is to be mechanically imposed under Section 44 (8) at the maximum rate. Even when in a case falling under Section 44(8), dehors Section 44(10) where an inspection unravels the phenomenon of unaccounted goods, it becomes the duty of the Officer to examine the issue as to whether penalty is to be imposed and what is the quantum of penalty to be imposed. Even when in a case falling under Section 44(8), dehors Section 44(10) where an inspection unravels the phenomenon of unaccounted goods, it becomes the duty of the Officer to examine the issue as to whether penalty is to be imposed and what is the quantum of penalty to be imposed. Certainly, while it may be open to the Officer to invoke Section 44(8) and to impose penalty in a case covered by Section 44(10), going by the dicta of this Court in St. Michels case (68 STC 360), the Officer has to exercise his discretion and consider whether penalty is to be imposed and still further what is the quantum of penalty to be imposed. There is indeed discretion as held by this Court in respect of a case otherwise coming under Section 28(8) which corresponds to Section 44(8) and certainly the view taken in the said decision would apply with all force even in the interpretation of Section 44(8) read with Section 44(10). Section 44(10) raises a clear presumption that when goods are located in an undisclosed godown that the same are to be treated as unaccounted. Certainly, it may not be open to the assessee to displace the presumption or dilute its ambit by attempting to show that the goods are in fact accounted. But, when the authority proceeds in a matter involving power under Section 44(8) read with Section 44(10), the Officer shall consider whether penalty is called for and also whether the maximum penalty is called for. There may be several relevant circumstances which may enter into the exercise of the discretion in the matter of imposition of penalty. Thus, I find that the Writ Petitions are without merit and I dismiss the Writ Petitions, subject to the observations made above. However, I make it clear that it is for the petitioners to approach the Appellate Authority and that I have not gone into the merits of the petitioners claims.