SALES TAX OFFICER, SPECIAL CIRCLE, ERNAKULAM & ANR. vs TATA OIL MILLS CO. LTD.

The Supreme Court held that Section 22(3) of the Kerala General Sales Tax Act, 1963, which mandates payment of excess tax collected by a dealer, is ultra vires as it does not fall under Entry 54 of the State List in the Constitution. The Court clarified that while the State can legislate on taxes related to sales or purchases, it cannot enact laws for recovery of amounts wrongly collected as tax. The judgment emphasized that any amount collected in excess of the tax leviable is not considered tax under the Act, thus invalidating the High Court's ruling that Section 22(3) was beyond legislative competence.