D CAWASJI AND CO Vs. STATE OF MYSORE

JUDGEMENT

(1.) In these writ petitions preferred under article 226 of the Constitution, the petitioners have challenged the constitutional validity of the Mysore Sales Tax (Amendment) Act, 1969 (Mysore Act 17 of 1969), hereinafter called the impugned Act. They have prayed for a mandamus directing the respondents to refund the amounts collected by way Of sales tax on duty of excise, education cess and health cess, on sales of arrack effected by the State to the petitioners between 1st July, 1966, and 30th June, 1967. The impugned Act by amendment of serial No. 39 in the Second Schedule to the Mysore Sales Tax Act, 1957 (Mysore Act 25 of 1957) (hereinafter called the Act) enhanced the rate of sales tax on "country liquor other than toddy" from "six and a half per cent." to "forty-five per cent." with retrospective effect to operate from the first day of April, 1966. It further validated the excess collection of tax made by the State.

(2.) In order to appreciate the contentions urged, it is necessary to set out briefly the relevant facts leading to the enactment of the impugned Act by the State Legislature.

(3.) Sales tax is collected on the sale of "country liquor other than toddy" by virtue of the power conferred on the State to make such collection under section 5(3)(a), proviso, read with section 19 of the Act. The levy of sales tax on "country liquor other than toddy" is made by section 5(3)(a) of the Act on the first or the earliest of successive dealers in the State who is liable to tax at the rate specified under column 3 corresponding to serial No. 39 of the Second Schedule. By virtue of the first proviso to section 5(3)(a) of the Act, the State Government is deemed to be the first dealer in the State in respect of sale of any of the goods mentioned in serial Nos. 38, 39 and 40 of the Second Schedule and is entitled to collect tax under section 19.