1985 (9) TMI 321

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....t v. Ajit Mills Ltd. [1977] 40 STC 497 (SC); [1978] 1 SCR 338, this appeal will have to be allowed. Before the High Court the provisions of section 9-B(3) and section 14-A of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), were challenged on the ground of lack of legislative competence by the assessee by way of a writ petition. The contention was while entry 54 of List II of the Seventh Schedule enables legislation imposing levy of tax on sale or purchase of goods, a provision that if a person (trader) realised any amount by way of tax when not exigible or realised any amount by way of tax in excess of the tax at the prescribed rate he should make over to the State by way of penalty such collections and a further provision that a r....

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....he person or persons from whom these had been collected would fall within the incidental and ancillary powers of the State Legislature while enacting a taxing statute under entry 54 of List II of the Seventh Schedule and the final decision of the Constitution Bench has answered the question in the affirmative upholding the validity of such provisions. While doing so the Constitution Bench disagreed with the view taken in Ashoka Marketing Co.'s case [1970] 26 STC 254 (SC). As regards Abdul Quader's case [1964] 15 STC 403 (SC) this Court felt that the crucial ratio of the decision was to be found in the following significant observation made in that judgment: "it [the law] does not provide for a penalty for collecting the amount wrongly by wa....

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....tions to the State was upheld as falling within the ancillary or incidental power under entry 54, List II, of the Seventh Schedule. In the instant case, before us, there is not merely a provision for making over such collections by the trader to the State but also a provision for refunding it by the State to the persons from whom such collections have been made. The impugned provisions will have, therefore, to be upheld as falling within the doctrine of ancillary or incidental legislative powers. The counsel for the assessees made a vain attempt to urge that at the material time (prior to the enactment of the amendments) there was no prohibition and no penalty contained in the enactment so as to make the provision for forfeiture valid. Af....