VENKATARAMAIYA, J. - (1.)IN all these petitions filed under Article 226 of the Constitution of India, the legality of the levy of sales tax under the provisions of the Mysore Sales Tax Act on the turnover of petitioners has been challenged. The turnover represents the amounts realised by sale of eatables and refreshments in hotels or restaurants kept by petitioners. Under section 3(a) of the Act the tax is payable on the annual turnover of every dealer. Sub-section (b) which at first prescribed the rate at which the tax is payable at three pies per rupee was altered by Act 25 of 1954 and now reads as follows :-
"(b) the tax shall be calculated at the following rates : Rate of tax. (1) In the case of every dealer whose total Rs. 25 per annum. turnover is Rs. 7,500 and above but not exceeding Rs. 10,000. (2) In the case of every dealer whose total The rate specified turnover exceeds Rs. 10,000 but does not in item (1) on the exceed Rs. 25,000 turnover not exceeding Rs. 10,000 and two pies in the rupee on the turnover exceeding Rs. 10,000. (3) In the case of every dealer whose The rate specified total turnover exceeds Rs. 25,000. in item (2) on the turnover not exceeding Rs. 25,000 and three pies in the rupee on the turnover exceeding Rs. 25,000. Provided that if and to the extent to which such turnover relates to articles of food and drink sold in a hotel, boarding house, restaurant or canteen, the tax shall be calculated at the following rates. Rate of tax. (1) In the case of every dealer whose total Rs. 75 per annum. turnover is Rs. 7,500 and above but not exceeding Rs. 10,000. (2) In the case of every dealer whose total The rate specified turnover exceeds Rs. 10,000 but does not in item (1) on the exceed Rs. 36,000 turnover not exceeding Rs. 10,000 and three pies in the rupee on the turnover exceeding Rs. 10,000. (3) In the case of every dealer whose The rate specified total turnover exceeds Rs. 36,000. in item (2) on the turnover not exceeding Rs. 36,000 and four and a half pies in the rupee on the turnover exceeding Rs. 36,000. Section 11 of the Act as amended states :- "No person, other than a registered dealer liable to the payment of tax under sub-sections (2) and (2-A) of section 3 shall collect any amount by way of tax under this Act; nor shall such registered dealer make any such collection except in respect of the sale or purchase of the goods specified in Schedule 1 and except in accordance with such conditions and restrictions, if any, as may be prescribed."

(2.)SECTION 3(2) provides that in regard to the articles specified in Schedule 1 the tax is to be levied and at the point mentioned therein. Section 3(2-A) deals with liability of persons not having a place of business in Mysore.
Section 11 is, it is said, found only in the Mysore Act and that there is no provision analogous to it in the laws applicable to other States. A double restriction is imposed under the section on the collection of tax; firstly, that it cannot be collected at all by the unregistered dealers and secondly, that it can be collected by the registered dealers only in respect of goods specified in Schedule 1. The registered dealers are thus compelled to pay the tax which they are forbidden to recover from others and cannot have recourse to shifting the burden on the consumer as is usual. It is argued on behalf of petitioners that in effect and reality what is taxed is the income of the assessee about which the State is not competent to legislate and that the new enactment is exceptionally severe as even the deductions permissible under the income-tax law cannot be claimed. The learned Advocate-General urged that legality of the levy does not depend on transferability of liability and that there is no hindrance to a person being taxed though he cannot realise it from others.

(3.)THE possibility of this is not sufficient to determine the nature of the tax and may affect the consideration of the tax being direct or indirect. Nor does it answer the criticism that the provision amounts to "colourable legislation" inasmuch as the tax which purports to be one on sales is in essence not so. These contentions are not without some force but do not help the petitioners. The section under which the levy is to be made is 3 not 11. A difficulty or disability is no doubt caused to petitioners by section 11 but this cannot be an excuse for their not being charged. The payment may diminish the gains or even increase the loss but has to be made irrespective of this, since the recovery of the tax from others is not a right conferred by the Sales Tax Act or the Constitution, much less a condition precedent to it. Further, the petitioners have not been taxed as yet and the petitions have been filed before the turnover is determined so that the bearing of section 11 in relation to petitioners is at best uncertain.
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