The assessee was a registered dealer, registered under the provisions of the Madras General Sales Tax Act (hereinafter referred to as the Act). In the assessment year 1952-53 a sum of Rs. 46, 456-12-6, which represented the amounts the assessee firm had collected that year from its purchasers by way of tax under section 8-B of the Act, was included in its assessable turnover. The contention of the assessee firm, that it was not liable to pay sales tax on that sum, was negatived by the departmental authorities, and the Appellate Tribunal agreed with them. It was the correctness of the decision that the assessee challenged before us.

On 7th January, 1954, a Division Bench of this High Court, which consisted of Satyanarayana Rao, J., and one of us, held in Deputy Commissioner of Commercial Taxes v. Krishnaswami Mudaliar that under the scheme of the Act the amount collected by a registered dealer from the consumer by way of sales tax and paid over to the Government should not be included in the turnover of the registered dealer as part of the sale price of the goods sold, and that that amount was not liable to be taxed over again. Subsequent to that, the Madras Legislature passed the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954 (Act XVII of 1954) (hereinafter referred to as the impugned Act). That Act received the assent of the President on 6th July, 1954.

Section 2 of the impugned Act ran :-

"In the case of sales made by a dealer before the 1st April, 1954, amounts collected by him by way of tax under the Madras General Sales Tax Act, 1939 (Madras Act IX of 1939) (hereinafter referred to as the principal Act), shall be deemed to have formed part of his turnover." *

Section 3(1) ran :-

"All assessments and collections made, all orders passed, and all action taken by any officer in the exercise or purported exercise of jurisdiction or powers conferred by the principal Act, and all judgments, decrees or orders pronounced by any Tribunal or Court in the exercise of its jurisdiction or powers with respect to matters in the principal Act, on the basis that amounts collected by a dealer by way of tax under the principal Act before the 1st April, 1954, formed part of the turnover of the dealer are hereby declared to have been validly made, passed, taken or pronounced, as the case may be; and any finding recorded by any officer, Tribunal or Court to a contrary effect and any order, judgment or decree in so far as such order, judgment or decree embodies or is based on any such finding and does not relate merely to the costs of the proceeding which resulted in the judgment, decree or order, shall be void and of no effect :

Provided that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this Act had not been passed." *

(Sub-section (2) omitted).

It was solely on the basis of Act XVII of 1954 that the taxing authorities and the Appellate Tribunal decided that the assessee was liable to pay sales tax on the disputed turnover. The petitioner contended that the impugned Act was ultra vires the legislature, and that it had no legislative competence to pass such a measure. The Appellate Tribunal declined to investigate that question.

No question of legislative competence arose for consideration in Krishnaswami Mudaliar's case. After pointing out that under the Bengal Act, which had no provision corresponding to section 8-B of the Madras Act, it had been held by the Calcutta High Court in Bata Shoe Co. v. Board if Revenue, West Bengal 1949 (1) STC 193), that it was permissible to include in the taxable turnover of a dealer amounts collected by that dealer by way of sales tax, Satyanarayana Rao, J., referred to the distinction between the cases where the dealer was not authorised by law to collect the tax but all the same added it to the sale price in the bill of sale and collected it from the customer and the cases where the dea