Ancillary taxing powers upheld for refunding tax-like sums collected from purchasers under sales tax law.

Section 29-A of the U.P. Sales Tax Act was upheld as within the State Legislature's competence under entry 54 of List II read with Article 246 because a refund mechanism for tax-like sums collected from purchasers was treated as ancillary and incidental to the power to tax sales or purchases of goods. The Court recognised that entry 54 has wide amplitude and can support provisions needed to make the taxing law effective, including measures protecting consumers from amounts recovered under the guise of tax. The earlier contrary view was rejected, and the challenge to the provision failed.

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Issues: Whether section 29-A of the U.P. Sales Tax Act, 1948, was within the legislative competence of the State Legislature under entry 54 of List II read with Article 246 of the Constitution of India.

Analysis: The provision required refund of amounts collected as tax to the person from whom they were actually realised, and its validity depended on whether such a refund mechanism was ancillary or incidental to the power to legislate on taxes on the sale or purchase of goods. The Court held that the subject-matter of entry 54 is of wide amplitude and includes incidental and ancillary provisions necessary to make the taxing law effective. Relying on the controlling view that sums collected under the guise of tax may be taken over and returned to the buyers from whom they were recovered, the Court treated the provision as a consumer-protection measure falling within the taxing entry. The earlier contrary view was held not to represent the correct law.

Conclusion: Section 29-A was constitutionally valid and within the legislative competence of the State Legislature; the challenge failed.

Final Conclusion: The appeal was dismissed because the impugned refund provision was upheld as a permissible incident of the State's power to legislate on sales tax.

Ratio Decidendi: A provision requiring refund of tax-like amounts collected from purchasers is constitutionally valid if it is ancillary or incidental to the power to legislate on taxes on the sale or purchase of goods.

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