Unlawful sales tax collections are not payable to the State and remain refundable to the assessee under the Act.

Section 11(2) of the Mysore Sales Tax Act was construed to apply only to sums collected as tax lawfully leviable under the Act, not to amounts recovered on a mistaken view of taxability or contrary to the Act. Collections made without such authority were therefore not payable to the Government. On that basis, the assessee was entitled to refund of the amount retained by the State and to the consequential writ relief sought.

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Issues: (i) Whether amounts collected by a registered dealer as sales tax, when the goods or transactions were not lawfully taxable, were payable to the Government under section 11(2) of the Mysore Sales Tax Act. (ii) Whether the assessee was entitled to refund of the amount so collected and to the writ sought in the connected petition.

Issue (i): Whether amounts collected by a registered dealer as sales tax, when the goods or transactions were not lawfully taxable, were payable to the Government under section 11(2) of the Mysore Sales Tax Act.

Analysis: Section 11(2) was construed as applying only to collections made by way of tax under the Act in the sense of tax lawfully leviable and collected as such. Amounts collected contrary to the Act, or under a mistaken conception of taxability, were held not to fall within the statutory requirement to pay over collections to the Government. The provision was read consistently with the analogous Madras provision, which was treated as in pari materia and as supporting the same limited construction. On that basis, the State could not claim unlawful collections merely because they had been recovered from purchasers.

Conclusion: The collected sums were not payable to the Government under section 11(2) of the Mysore Sales Tax Act.

Issue (ii): Whether the assessee was entitled to refund of the amount so collected and to the writ sought in the connected petition.

Analysis: Once the collections were held not to be payable to the Government, the departmental retention of the amount had no legal basis. The Court therefore accepted the assessee's entitlement to refund in the civil petition and to the consequential writ in the connected writ petition.

Conclusion: The assessee was entitled to refund of the amount and to the writ prayed for.

Final Conclusion: The connected petitions succeeded, and the amounts collected without authority could not be retained by the State.

Ratio Decidendi: Section 11(2) of the Mysore Sales Tax Act applies only to collections that are lawfully recoverable as tax under the Act, and amounts collected without such authority are not payable to the Government and remain refundable to the assessee.

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