Refund of tax collected from customers is confined to the person who actually paid it under the statutory scheme.

The Supreme Court of India's treatment of unamended section 29-A of the U.P. Trade Tax Act confirms that the provision was to be treated as remaining on the statute book, following overruling of the earlier contrary view. On that basis, tax amounts collected by a dealer from customers were not refundable to the dealer merely because the final assessment liability was lower. Refund under the statutory scheme lay only with the person from whom the amount had actually been realised, and the treasury deposit direction was therefore upheld.

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Issues: Whether unamended section 29-A of the U.P. Trade Tax Act remained valid and whether the dealer could obtain refund of amounts collected from customers and deposited in the treasury.

Analysis: The earlier view striking down the provision stood overruled, and the unamended provision was held to have always remained on the statute book. On that basis, the amount collected by the dealer could not be refunded to the dealer merely because the assessment resulted in a lower tax liability. The statutory scheme contemplated refund only to the person from whom the amount had actually been realised, and no such claim was made. The direction to deposit the amount in the Government treasury was therefore correct.

Conclusion: The challenge to the operation of unamended section 29-A failed, and the revenue was entitled to retain the benefit of the treasury deposit direction.

Final Conclusion: The impugned judgment was set aside and the order of the appellate authority was restored, leaving the revenue position in favour of the State.

Ratio Decidendi: Where a dealer has collected an amount as tax from customers, the amount is refundable only to the person from whom it was collected, and a declaration that the provision was within legislative competence means the provision continues to operate as valid law unless re-enacted only for the amended part.

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