STATE OF U.P. AND ANR. versus ANNAPURNA BISCUIT MFG. CO.

Citation: [1973] 3 S.C.R. 987 · Decided: 16-04-1973 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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987 
STATE OF U.P. AND ANR. 
v. 
ANNAPURNA BISCUIT MFG. CO. 
April 16, 1973 
[K. S. HEODE AND H. R. KHANNA, JJ.] 
U.P, Sat .. Tax Act 1947 s. 29-A-Yalldity-U.P. Salta Tax (Amtnd• 
mint&: Ya/ldatlon)Act 1971 Ss. IS and 17-Stction IS lns1rtlng s. 29·A 
Into parent Act-Stctlon 17 making constqutntlal provlslon,,_Yalidlty of 
Ss. IS and 17-State Legislature whtthtr has compttene< lo enact law 
enforcing dtposlt of monty wrong~v reallstd by dtaler as sales.tax-Such 
law whtthtr covtrtd by Constitution of India, Sevenrh Schedule, entry 
54 List 11 or entries 7 and 10' List Ill. 
By s. 29-A of the U.P. Sales Tax Act 1948 inserted by s. 15 of th.e 
U.P. Sales Tax (Amending and Validation) Act 1971 sales-tax wrongly 
realised by a dealer from any person had to be deposited in IM Govern· 
ment Treasury. It would be held in trust by the Government on behalf 
of such person and refunded to him if application for that purpose was 
made within a period laid down in the section. Section 17 of the Amend· 
ing Act contained consequential and validating provisions. 
The 
High 
Court of Allahabad in petitions filed by the respondents 
held that the 
State Legislature had no competence to enact a provision like s. 29-A and 
therefore its enactment was unconstitutional. 
Consequently s. 17 of the 
Amending Act was also unconstitutional. 
Dismissing the appeal filed by the State, 
HELD : (i) The argument that provision like section 29-A is ancillary 
or incidental to the collection of tax legitimately due under a law made 
under entry 54 has no force in view of this Court's decision in Abdul 
Quader's case and in Ashoka Marketing Ltd., wherein provisions similar 
to s. 29-A were held not to fall under entry 54 of List II. [991 DJ 
· (ii) The impugned law could not also be held to fall under. entry 7 
List III which relates to contracts. A similar argument was rejected by 
this Court in Ashoka Marketing Ltd. (992 G] 
(iii) The impugned law could not be said to relate to trusts so as to 
fall under entry I 0 of List Ill. A law compelling deposit of money 
m-ongly realised as sales~tax ·cannot in pith and substance be considered 
to be a law relating to trusts. [993 BJ 
(iv) S. 17 was linked with s. 15 and could not exist independently of 
that section. The High Court rightly held it to be unconstitutional. 
Abdul Quarder and Co. v. Sales Tax Officer, Hyderabad, (1970] 25 
S.T.C. 155 and Ashoka Marketing Ltd. v. State of Bihar and Another, 
[1970] 26 I.T.R. 254, applied. 
CIVIL APPELLATE JURISDICTION : 
Civil Appeal No. 1716 
of \972. 
Appeal by certificate from the judgment and order dated 
November 11, 1971 of the Allahabad High Court in Civil Misc. 
Writ Nos. 3716 of 1970. 
988 
SUPREME COURT REPORTS 
[1973] 3 s.c.a. 
S. N. Kachar, N. D. Karkhanis, K. C. Agarwala and O. P. 
A 
Rana, for the appellants. 
Yogeshwar Prasad, S. K. Bagga and S. Bagga, 
pondents. 
The Judgment of the Coun was delivered by 
for tlle res· 
' 
KHANNA, J. This appeal by certificate is directed against the 
judgment of Allahabad High Court whereby that court held the 
provisions of section 29-A of the U.P. Sales Tax (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 of 1971) hereinafter referred to as the Amend-
ing Act) as well as section 17 of the Amending Act to be uncon-
stitutional. 
This Court in the case of Commissioner of Sales Tax v. Ganga 
Sugar Corporation Ltd.(') 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 provisions of 
clause (g) of sub-section (2) of section 14, the amount 
realised by any person as tax on sale of any goods shall, 
not withstanding anything contained in any other 
provision of this Act, be deposited by him in a Govern-
ment treasury within such period as may be pres.cribed, 
if the amount so realised exceeds the amount payable as 
tax in respect of that sale or if no tax is payable in res. 
pect thereof." 
The Court in that context relied upon the decision in Abdul 
Quader and Co. v. Sales Tax Officer, Hyderabad. (2 ) it was held 
in Abdul Quader's case that the State Legislature in making a 
similar provision, viz., section 11(2) in the Hyderabad General 
Sales Tax Act, could not be regarded as having directly legislated 
for the imposition of sales and purchase tax under entry 54 List 
I

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