1964 (7) TMI 29

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....-In these petitions, the validity of section 18(3) of the Mysore Sales Tax Act, 1957, as amended by Mysore Act No. 9 of 1964, is challenged as being beyond the legislature competence of the State Legislature. The amendments effected to that section read: "In sub-section (3) of section 18 of the principal Act- (i) for the words "by way of the tax" wherever they occur, the words "by way of tax or....

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....unt to the State and not otherwise. Collections of certain sums of money as sales tax by a registered dealer from his customers in respect of transactions of sale not exigible to tax, fall wholly outside the scope of the Act. Section 18(3) therefore does not apply to such collections and the Revenue is not entitled to take action under that sub-section. The validity of a section similar to the ame....

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....B(2) were not exactly the same as the words in section 11(2), with which we are concerned here, the provision in substance was to the same effect as section 11(2). In view of what we have said above, that decision must be held to be incorrect." The Supreme Court came to the conclusion that the State Legislatures have no legislative competence to convert into tax what is not really a "tax." In v....