TaxTMI 
TaxTMI 
1973 (4) TMI 77
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....p; KHANNA, J-This appeal by certificate is directed against the judgment of the Allahabad High Court whereby that court held the provisions of section 29-A of the U.P. Sales Tax Act (Act 15 of 1948) (hereinafter referred to as the principal Act), inserted by section 15 of the U. P. Sales Tax (Amendment and Validation) Act, 1971 (Amendment Act 20 of 1971) (hereinafter referred to as the amending Act), as well as section 17 of the amending Act to be unconstitutional. This court, in the case of Commissioner of Sales Tax v. Ganga Sugar Corporation Ltd. [1970] 25 S.T.C. 155 (S.C.)., held that section 8-A(4) of the principal Act was ultra vires the State Legislature. Section 8-A(4) read as under: "8-A. (4) Without prejudice to the provis....
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....29-A. Refund in special cases.-Notwithstanding anything contained in this Act or in any other law for the time being in force or in any judgment, decree or order of any court, where any amount is either deposited or paid by any dealer or other person under sub-section (4) or sub-section (5) of section 8-A, such amount or any part thereof shall on a claim being made in that behalf in such form and within such period as may be prescribed, be refunded to the person from whom such dealer or the person had actually realised such amount or part, and to no other person." On August 22, 1971, the amending Act was published. A number of amendments were made by the amending Act in the principal Act: By section 10 of the amending Act, sub-sections (....
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....ision or reference, if any, in respect thereof, whichever is later. Explanation-The expression 'final order on appeal, revision or reference' includes an order passed by the Supreme Court under article 32, article 132, article 133, article 136, or article 137, or by the High Court under article 226 or article 227 of the Constitution." Section 17 contains transitional provisions for deeming and validation consequent upon the deletion of sub-sections (4) and (5) of section 8-A and the substitution of section 29-A in the principal Act. The dispute relates to the amount which a dealer wrongly realises as sales tax from the customer and the question which arises for consideration is whether a State Legislature has the legislative competenc....
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....ithstanding that the dealer is not liable to pay such amount as tax or that only a part of it is due from him as tax under this Act". Sub-section (2) provides that the amount so deposited by a dealer shall to the extent it is not due as tax from him be held by the State Government in trust for the person from whom it was realised by the dealer or for his legal representatives. It further provides that when a dealer has deposited the amount into the treasury, he shall no longer be liable to the person from whom he has realised the amount. According to sub-section (3) of the section, the amount deposited into the Government treasury by the dealer or any part thereof shall, on a claim being made in that behalf in such manner and form as may....
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.... made under that entry, but even so lays down that though it is not exigible under the law, it shall be paid over to Government, merely because some dealers by mistake or otherwise have collected it as tax, it is difficult to see how such a provision can be ancillary or incidental to the collection of tax legitimately due under a law made under the relevant taxing entry." The above observations were quoted with approval by a six-judge Bench of this Court in the case of Ashoka Marketing Ltd. v. State of Bihar [1970] 26 S.T.C. 254 (S.C.). In that case, the provisions of section 20A of the Bihar Sales Tax Act, which were substantially similar to those of section 29-A now impugned before us, were assailed. Shah, J. (as he then was), speak....
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....the claim in the form of a demand for depositing the money with the State which the dealer has collected, but which he was not entitled to collect." In view of the above decision, the contention that the impugned Act would be covered by entry 54 in List II can plainly be not accepted. Argument has been advanced before us on behalf of the appellant that the impugned law would be covered by entry 7 in List III, which relates, inter alia, to contracts. A similar argument was advanced in the case of Ashoka Marketing Ltd. [1970] 26 S.T.C. 254 (S.C.)., and was rejected in the following words: "We fail to appreciate how power to legislate in respect of entries 6, 7 and 13 would authorise the State Legislature to legislate in respec....