ASHOKA MARKETING LTD. versus STATE OF BIHAR AND ANR.

ASHOKA MARKETING LTD. versus STATE OF BIHAR AND ANR.

Sections 20A (3), (4), and (5) of the Bihar Sales Tax Act, 1959 are ultra vires the State Legislature as they seek to appropriate for the State an amount collected as tax which the State is incompetent to levy. Such provisions are not ancillary or incidental to the power to levy sales tax under Entry 54, List II of the Seventh Schedule, nor do they fall under Entries 6, 7, and 13 of List III.

Parties
Appellant/assessee: Ashoka Marketing Ltd.; Respondent: State of Bihar
Jurisdiction
India
Judgment Date
30 January 1970
Procedural Posture
Civil Appeal / Supreme Court Appeal by Special Leave From Order of Patna High Court in Writ Petition C.w.j.c. No. 143 of 1966
Outcome
Appeal allowed.
Legal Topics
Competence of State Legislature Under Entry 54 List II Seventh Schedule, Validity of Section 20 a of Bihar Sales Tax Act 1959, Sales Tax Collection and Refund
Constitutional Law Tax Law Competence of State Legislature Under Entry 54 List II Seventh Schedule Validity of Section 20 a of Bihar Sales Tax Act 1959 Sales Tax Collection and Refund

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Parties

Ashoka Marketing Ltd.

Appellant/assessee

State of Bihar

Respondent

Procedural Posture

Civil Appeal / Supreme Court Appeal by Special Leave From Order of Patna High Court in Writ Petition C.w.j.c. No. 143 of 1966

Legal Issues

  1. 1 Whether section 20A (3), (4) and (5) of the Bihar Sales Tax Act, 1959 are within the competence of the State Legislature
  2. 2 Whether an order may be made under s. 20A for depositing with the State Government an amount collected by a registered dealer from his constituent to recoup himself for payment of sales-tax which the constituent was not liable to pay

Ratio Decidendi

Sections 20A (3), (4), and (5) of the Bihar Sales Tax Act, 1959 are ultra vires the State Legislature as they seek to appropriate for the State an amount collected as tax which the State is incompetent to levy. Such provisions are not ancillary or incidental to the power to levy sales tax under Entry 54, List II of the Seventh Schedule, nor do they fall under Entries 6, 7, and 13 of List III.

Court Disposition

Appeal allowed.

Orders

  • Petition of the assessee is granted.
  • It is declared that sub-sections (3), (4), and (5) of section 20A are ultra vires the State Legislature.