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TMI Blog1975 (7) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... t related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act. We may now set out the facts giving rise to one of the appeals. Both the learned counsel are agreed that the decision in that would also govern the other appeal. Under section 5 of the Act, tax is payable by a dealer on his taxable turnover. "Taxable turnover" is defined in section 2 (xxv) of the Act as the turnover on which a dealer is liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed by the Rules under the Act. It does not, however, include the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export or import of goods. The Kerala General Sales Tax Rules have been framed by the State Government in exercise of the powers conferred by section 57 of the Act. According to clause (i) of rule 9 of the said Rules, in determining the taxable turnover the following amount shall be deducted from the total turnover of the dealer: "the excise duty, if any, paid by the dealer to the Government of Kerala or the Central Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act to be beyond the legislative competence of the State Legislature, referred to entry 54 of the State List in the Seventh Schedule to the Constitution upon which reliance had been placed on behalf of the State. It was held that the State Legislature was incompetent to enact the impugned provisions contained in sub-section (3) of section 22 of the Act under the above entry. In appeal before us Dr. Seiyed Muhamad on behalf of the appellants has assailed the judgment of the Division Bench of the High Court. As against that, Mr. Pai on behalf of the respondent has canvassed for the correctness of the said judgment. After hearing the learned counsel, we are of the opinion that there is no merit in these two appeals. A State Legislature is competent to make a law under entry 54 of List II in the Seventh Schedule to the Constitution in respect of "taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I". Entry 92-A of List I relates to taxes on the sale or purchase of goods other than newspapers, where such sale or purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount shall be recovered from him as if it were arrears of land revenue." The appellant in that case collected sales tax from the purchasers of betel leaves in connection with the sales made by it. The appellant, however, did not pay the amount collected to the Government. The Government directed the appellant to pay the amount to the Government. The appellant thereupon filed a writ petition in the High Court questioning the validity of section 11(2). The main contention of the appellant before the High Court was that section 11(2), which authorised the Government to recover a tax collected without the authority of law was beyond the competence of the State Legislature because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect under the authority of a law enacted under entry 54 of List II of the Seventh Schedule to the Constitution any such amount. The High Court upheld the validity of section 11(2). On appeal to this Court it was observed by the Constitution Bench as under: "The first question therefore that falls for consideration is whether it was open to the State Legislature under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (6) and (7) of that section were also held to be invalid. Sub-section (3) of section 20A of the Bihar Sales Tax Act read as under: "(3)(a) Notwithstanding anything to the contrary contained in any law or contract or any judgment, decree or order of any tribunal, court or authority, if the prescribed authority has reason to believe that any dealer has or had, at any time, whether before or after the commencement of this Act, collected any such amount, in a case in which or to an extent to which the said dealer was or is not liable to pay such amount, it shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein, either to attend in person or through an authorised representative to show cause why he should not deposit into the Government treasury the amount so collected by him. (b) On the day specified in the notice under clause (a) or as soon thereafter as may be, the prescribed authority may, after giving the dealer or his authorised representative a reasonable opportunity of being heard and examining such accounts and other evidence as may be produced by or on behalf of the dealer and making such further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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