KASTURI LAL HARLAL Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) This appeal by certificate raises a short question as to the constitutional validity of S. 29A of the U. P. Sales Tax Act, 1948. This section, which was introduced in the U. P. Sales Tax Act, 1948 by S. 17 of the U. P. Taxation Laws (Amendment) Act, 1969. has been held to be constitutionally valid by a Division Bench of the Allahabad High Court on 13th July 1970. The appellants question the correctness of this view taken by the High Court.

(2.) The appellants carry on business as dealers in coal and they are registered as ,such under U. P. Sales Tax Act, 1948. Prior to 1st October 1965, there was no sales tax levied on sale of coal and for the first time on 1st October 1965, coal became a taxable commodity under the U. P. Sales Tax Act, 1948. The appellants, proceeding on the footing that sales tax was payable by them on sale of coal from and after 1st October 1965, collected amounts by way of sales tax from the purchasers and submitted their returns for the assessment year 1965-66 after depositing a sum of Rs. 10,073.86 representing the amount of tax payable by them in accordance with their returns. It was, however, found as a result of the assessment Order made by the Sales Tax Officer on 28th March 1970 that no sales tax was payable by the appellants on sales of coal under the U. P. Sales Tax Act, 1948. The appellants thereupon claimed refund of the sum of Rs. 10,073.86 but the Sales Tax Officer rejected the claim made by the appellants on the ground that by reason of S. 29A, no refund was claimable by the appellants and the only persons entitled to claim refund were those from whom the appellants had collected the tax. This Order made by the Sales Tax Officer was challenged by the appellants by filing a writ petition in the High Court of Allahabad and the principal ground on which the correctness of this Order was challenged was that S. 29A was ultra vires as being outside the legislative competence of the State legislature. The High Court negatived this challenge and upheld the constitutional validity of S. 29A and on this view sustained the Order made by the Sales Tax Officer. The appellants thereupon preferred the present appeal after obtaining certificate of fitness from the High Court.

(3.) It is necessary at this stage to set out the relevant provisions of the U. P. Sales Tax Act, 1948 as they stood at the material time. Sub-section (4) of S. 8-A made the following provision: