Shah, J. - (1.) Ashoka Marketing Ltd.-hereinafter called 'the assesses' -returned for the year 1956-57 under the Bihar Sales Tax Act, 1947, an amount of Rs. 2,46 67,517-1-6 as its turnover from sale of cement and other commodities. The Superintendent of Sales Tax brought to tax an additional amount of Rs. 7,67,702-13-0 being the railway freight paid in respect of the goods supplied by the assessee. By order dated April 2, 1961 the Appellate Authority set aside the order directing inclusion of the railway freight in the turnover, and ordered that the assessment be revised.
(2.) In the meantime the Bihar Sales Tax Act, 1947, was repealed and was replaced by the Bihar Sales Tax Act, 19 of 1959. By Act 20 of 1962, Section 20-A was introduced in the Bihar Sales Tax Act 19 of 1959. The relevant provisions of Section 20-A were: "(1) No person who is not a registered dealer shall collect from any person any amount, by whatever name or description it may be called, towards or purporting to be tax on sale of goods. (2) No registered dealer shall collect from any person any such amount, except in a case in which and to the extent to which such dealer is liable to pay tax under this Act. (3) (a) Notwithstanding anything to the contrary contained in any law or contract or any judgment, decree or order of any Tribunal, Court or authority, if the prescribed authority has reason to believe that any dealer has or had, at any time, whether before or after the commencement of this Act, collected any such amount, in a case in which or to an extent to which the said dealer was or is not liable to pay such amount, it shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein either to attend in person or through authorised representative to show cause why he should not deposit into the Government treasury the amount so collected by him. (b) On the day specified in the notice under Clause (a) or as soon thereafter as may be, the prescribed authority may, after giving the dealer or his authorised representative a reasonable opportunity of being heard and examining such accounts and other evidence as may be produced by or on behalf of the dealer and making such further enquiry as it may deem necessary, order that the dealer shall deposit forthwith into the Government treasury, the amount found to have been so collected by the dealer and not refunded prior to the receipt of the notice aforesaid to the person from whom it had been collected. "(4) Where any amount so collected by the dealer and deposited by him into the Government treasury has already been refunded to the dealer in pursuance of or as a result of any judgment, decree or order of any Tribunal, Court or authority, but the dealer has not refunded the amount to the person from whom he had collected it, the prescribed authority shall, notwithstanding such refund to the dealer, proceed to take action in accordance with the provisions of subsection (3) for securing deposit of such amount. (5) Where any such amount has not been refunded to the dealer before the commencement of this Act but a refund has been directed by a Court, Tribunal or authority, the amount shall notwithstanding such direction, be deemed to be a deposit made in pursuance of an order under sub-section (3) . (6) ********** (7) Notwithstanding anything to the contrary in any law or contract, when any amount is deposited by a dealer in compliance with an order under sub-section (3) or sub-section (4) or is deemed, under sub-section (5) , to have been so deposited, such deposit shall constitute a good and complete discharge of the liability of the dealer in respect of such amount to the person from whom it was collected. (8) The person from whom the dealer has collected the amount deposited in pursuance of an order under sub-section (3) or sub-section (4) or deemed, under sub-section (5) , to have been so deposited shall be entitled to apply to the prescribed authority in the prescribed manner for refund of the amount to him and the said authority shall allow the refund if it is satisfied that the claim is in order: Provided that no such refund shall be allowed unless the application is made before the expiry of the period within which the applicant could have claimed the amount from the dealer by a civil suit had his liability not been discharged in accordance with the provisions of subsection (7) : Provided further that no claim for such refund shall be rejected without giving the applicant a reasonable opportunity of being heard. ********** "
(3.) On July 31, 1963, the Assistant Commissioner of Commercial Taxes, Shahabad Circle, issued a notice under Section 20-A (3) of the Bihar Sales Tax Act, 1959, requiring the assessee to show cause why an amount of Rs. 23,990-11-0 being the sales-tax on the railway freight which had become refundable under the order of assessment be not forfeited. The assessee in reply contended, inter alia, that Section 20-A of the Bihar Sales Tax Act was ultra vires the State Legislature and that in any case it had no application to his case. The Assistant Commissioner of Commercial Taxes rejected the contention and passed an order directing that, the amount of Rs. 23,990-11-0 do stand forfeited to the Government and further directed that the amount be deposited in the Government treasury.;