Report No. 61
6.4. Earlier cases relied on.-
The constitutional validity of this provision was challenged in the Allahabad High Court, which declared it as unconstitutional. There was an appeal to the Supreme Court (on a certificate granted by the High Court). The Supreme Court dismissed the appeal, relying on its two earlier decisions. The first was Commissioner of Sales Tax v. Ganga Sugar Corporation Ltd., (1970) 25 STC 155 (SC). (Section 8A, U.P. Act)., in which the Supreme Court had declared a similar provision [section 8A(4)J ultra vires the Constitution. Section 8A(4) read as follows:-
"8A (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, notwithstanding anything contained in any other provision of this Act, be deposited by him in the 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."
An Andhra Pradesh case.-The second case was Abdul Quadar & Co. v. Sales Tax Officer, Hyderabad, (1964) 15 STC 493: AIR 1964 SC 922. In that case also the Supreme Court had declared section 11(2) of the Hyderabad General Sales Tax Act, which required the dealers to deposit tax wrongly collected by them in the Government Treasury, to be ultra vires the Constitution.