State sales tax penalty for unauthorised tax collection held beyond legislative competence and unsustainable after amendment.

Penalty for collecting amounts purporting to be tax on sales of goods belonging to principals under section 18-A of the Mysore Sales Tax Act, 1957 was held unsustainable. The amendment to section 18(1) was treated as making no material difference to the earlier legal position, and the provision was regarded as analogous to a similar sales tax provision previously considered by the Supreme Court. On that basis, the corresponding penalty provision was viewed as beyond the State's legislative competence under entry 54 of List II of the Seventh Schedule to the Constitution, and the revision petition was dismissed.

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Issues: Whether penalty under section 18-A of the Mysore Sales Tax Act, 1957, for collection of tax in contravention of section 18(1) was sustainable after the amendment to section 18(1), and whether the provision was within the State's legislative competence.

Analysis: The assessment records showed that the assessee had collected amounts purporting to be tax on sales of goods belonging to principals, and penalty had been imposed under section 18-A for breach of section 18(1). The amendment to section 18(1) was held to make no difference to the legal position earlier laid down. The provision was also treated as analogous to a similar sales tax provision considered by the Supreme Court, where the corresponding penalty provision was held to be beyond the legislative competence of the State under entry 54 of List II of the Seventh Schedule to the Constitution of India.

Conclusion: The penalty was not sustainable and the revision petition was dismissed.

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