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Judgment
Ramakrishnan, J.—This revision is filed by the State against the order of the Sales Tax Appellate Tribunal in Tribunal Appeal No. 819 of
1961. In the view of the assessing authority, the assessee had collected a certain amount of Rs. 5,698.38 by way of sales tax on a transaction
which clearly amounted to an inter-State sale hit by the ban under the appropriate article of the Indian Constitution. Nevertheless relying on Section
22(3) of the Madras General Sales Tax Act, 1959, the assessing authority directed the assessee to pay this amount to the Government. When the
matter came up before the Tribunal, it examined the invoices issued in the case. There were two such invoices. They showed that on the first
occasion the sale price was fixed for an amount which included sales tax but the second invoice fixed the sale price at a lesser figure. In the opinion
of the Tribunal the assessee did not collect the amount by way of sales tax and therefore the department could not sustain this claim even assuming
that Section 22(3) of the Act was intra vires the Legislature. But the learned Government Pleader fairly brings to our notice a decision of the
Supreme Court reported in Abdul Quader & Co. v. Sales Tax Officer [1964] 15 S.T.C. 403 which laid down that Section 11(2) of the
Hyderabad General Sales Tax Act, 1950, which is in pari materia with Section 22(3) of the Madras General Sales Tax Act, was not within the
legislative competence of the State Legislature. In the view of the Supreme Court, if a dealer has collected anything from a purchaser which is not
authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the
dealer; but unless the money so collected is due as tax, the State cannot by law make it recoverable simply because it has been wrongly collected
by the dealer, nor can the State Legislature under the guise of incidental or ancillary power, do indirectly what it cannot do directly. Therefore apart
from the question whether the assessee did in fact collect the amount by way of sales tax, it is clear that in accordance with the decision of the
Supreme Court, the State Legislature has no power to enact that the amount collected by way of sales tax, when no sales tax is payable, should be
paid over to the State Government.
We therefore reject the revision case. The respondent is not represented. There will be no order as to costs.