H. R. Khanna, J. - (1.) This judgment would dispose of civil appeals Nos. 1988 and 1989 of 1970, filed on certificate against the judgment of the Kerala High Court, whereby that court held that it was beyond the competence of the State Legislature to enact law contained in sub-section (3) of Section 22 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) (hereinafter referred to as the Act) in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act.
(2.) We may now set out the facts giving rise to one of the appeals. Both the learned counsel are agreed that the decision in that would also govern the other appeal.
(3.) Under Section 5 of the Act, tax is payable by a dealer on his taxable turnover. "Taxable turnover is defined in Section 2 (xxv) of the Act as the turnover on which a dealer is liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed by the rules under the Act. It does not, however, include the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export or import of foods. The Kerala General Sales Tax Rules have been framed by the State Government in exercise of the power conferred by Section 57 of the Act. According to clause (i) of rule 9 of the said rules, in determining the taxable turnover the following amount shall be deducted from the total turnover of the dealer:"the excise duty, if any, paid by the dealer to the Government of Kerala or the Central Government in respect of the goods sold by him". It may be stated that clause (i) was omitted subsequently but we are concerned with the period when that clause was an integral part of the rule.;