Sales tax forfeiture provisions beyond legislative competence; integrated scheme could not be saved by severability.

Sections 30-A and 30-B of the Andhra Pradesh General Sales Tax Act were analysed as a penal and forfeiture scheme targeting amounts collected as tax though not lawfully exigible. The court held that such provisions were not a law on taxes on sale or purchase within Entry 54 of List II, and that ancillary or incidental power could not extend to requiring payment over or forfeiture of wrongly collected sums. The alternative reliance on Entry 64 and Article 246 also failed because the offence and forfeiture provisions were only an indirect device to achieve an impermissible object. The scheme was treated as integrated, so the invalid core provisions could not be severed, rendering the enactment invalid in toto.

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Issues: (i) Whether sections 30-A and 30-B of the Andhra Pradesh General Sales Tax Act, 1957 were within the legislative competence of the State Legislature under Entry 54 of List II, read with the incidental or ancillary power and Entry 64 read with Article 246 of the Constitution of India; (ii) whether the valid and invalid parts of section 30-B and the connected scheme of sections 30-A and 30-B were severable.

Issue (i): Whether sections 30-A and 30-B of the Andhra Pradesh General Sales Tax Act, 1957 were within the legislative competence of the State Legislature under Entry 54 of List II, read with the incidental or ancillary power and Entry 64 read with Article 246 of the Constitution of India.

Analysis: The provisions sought to prohibit collection of amounts by way of tax in certain cases, impose penalty, and provide forfeiture to the State of amounts collected though not exigible as tax. Such a measure was held not to be a law on taxes on sale or purchase of goods within Entry 54. The power to levy and collect sales tax does not carry with it an ancillary power to require payment over or forfeiture of money wrongly collected as tax, because that would supplement, not merely complement, the taxing entry. The attempt to sustain the provisions under Entry 64 and Article 246 also failed, since the offence and forfeiture provisions were not, in substance, laws with respect to the subject-matter of Entry 54 but an indirect device to achieve what could not be done directly.

Conclusion: Sections 30-A and 30-B were beyond the legislative competence of the State Legislature and were ultra vires of the Constitution.

Issue (ii): Whether the valid and invalid parts of section 30-B and the connected scheme of sections 30-A and 30-B were severable.

Analysis: The court applied the doctrine of severability by asking whether the Legislature would have enacted the measure without the invalid portions and whether the remaining part could stand independently. The scheme was found to be a single and integrated one designed to reach amounts collected as tax though not lawfully exigible. The valid portion of section 30-B was inextricably linked with the invalid parts, and section 30-A was part of the same unified legislative plan. Removing the invalid parts would defeat the legislative purpose.

Conclusion: The invalidity of the offending parts rendered sections 30-A and 30-B invalid in toto.

Final Conclusion: The impugned penal and forfeiture scheme could not be sustained either on the taxing entry or on severability, and the petitioners were entitled to prohibition against its enforcement.

Ratio Decidendi: A State law under the sales tax entry cannot, under the guise of incidental or ancillary power or by invoking offence-making power, require forfeiture or payment over of amounts collected as tax but not legally exigible; where such provisions form an integrated scheme, the invalidity of the core provisions may destroy the whole enactment.

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