Judgment

KHANNA, J.:- This appeal by certificate is directed against the judgment of Allahabad High Court whereby that court held that provisions of Section 29-A of the U. P sales Tax Act (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 Amending Act) as well as Section 17 of the Amending Act to be unconstitutional.

This Court in the case of Commissioner of Sales-tax v Ganga Sugar Corporation Ltd., (1970) 25 STC 155 (SC) 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-sec. (2) of Section 14, the amount realised by any person as tax on sale of any goods shall, notwithstanding anything contained in any other provision of this Act, be deposited by him in a Government treasury within such period as may be prescribed, if the amount so realised exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof "

The Court in that context relied upon the decision in Abdul Quader and Co v. Sales-tax Officer, Hyderabad, (1964) 15 STC 403. 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 II in the seventh Schedule to the Constitution because the amount though collected by way of tax was not exigible as tax under the law. It was observed:

"We do not think that the ambit of ancillary or incidental power goes to the extent of permitting Legislature to provide that though the amount collected may be wrongly - by way of tax is not exigible under the law as made under the relevant taxing entry, it shall still be paid over to Government, as if it were a tax.

In 1969 the Uttar Pradesh Taxation Amendment Act, 1969 (U. P. Act 11 of 1969) was passed. Section 17 of that Act inserted Section 29-A which read as under:

"29-A -Refund in special cases.

Notwithstanding anything contained in this Act or in any other law for the time being in force or in any judgment, decree or order of any court, where any amount is either deposited or paid by any dealer or other person under sub-section (4) or sub-section (5) of Section 8-A such amount or any part thereof shall on a claim being made in that behalf in such form and within such period as may be prescribed, be refunded to the person from whom such dealer or the person had actually realised such amount or part, and to no other person "

On August 22, 1971 the Amending Act was published. A number of amendments were made by the amending Act in the principal Act. By S. 10 of the Amending Act, sub-sections (4) and (5) of Section 8-A were omitted. Section 15 of the Amending Act was as under:

"15. For Section 29-A of the principal Act, the following section shall be substituted, namely:

"29-A (1) Where any amount is realised from any person by any dealer purporting to do so by way of realisation of tax on the sale of any goods to such person, such dealer shall deposit the entire amount so realised into the Government treasury, within such period as may be prescribed, notwithstanding that the dealer is not liable to pay such amount as tax or that only a part of it is due from him as tax under this Act.

(2) Any amount deposited by any dealer under sub-section (1) shall, to the extent it is not due as tax, be held by the State Government in trust for the person from whom it was realised by the dealer, or for his legal representatives, and the deposit shall discharge such dealer of the liability in respect thereof to the extent of the deposit.

(3) Where any amount is deposited by any dealer under sub-section (1), such amount or any part thereof shall, on a claim being made in that behalf in such f