Chandra Reddy, C.J.
1. In these petitions, the validity of Section 11 (2) of the Hyderabad Sales-tax Act is assailed. Before we examine the soundness of the contention based on the provisions of Section 11 (2) of the Act, it is useful to state the material facts on which the decision of the department was based. The petitioners in W. P. No. 1123 of 1956 acted as agents in the State of Hyderabad to both resident and non-resident principals in regard to the sale of betel leaves. Under the Hyderabad General Sales-tax Act betel leaves were made taxable at the purchase point from 1st May 1953 and prior to that they were liable to tax at the sale point. For the assessment year, the petitioners collected sales-tax from the purchasers assuring the purchasers that the incidents of tax lay on the sellers and that there would be no further liability on the part of the purchasers to pay the tax. The petitioners also withheld these amounts from the principal for the purpose of making it over to the Government.
Nevertheless they did not pay this to the department but entered it in the suspense account of their principal. This was disclosed when their accounts were scrutinised by the department while checking the correctness of the returns submitted by them. When they were called upon to pay this over to the Government, the petitioners pleaded that they were entitled to exemption in that behalf invoking notification which imposed tax on the purchases of betel leaves. The department overruled their, objection and directed the petitioners to pay Rs. 1112-1-9 after giving credit to a sum of Rs. 8306-15-9 already realised from them. Tt is to quash that order that W. P. No. 1123 of 1956 was tiled.
2. The contention urged in the petition was that the demand for the tax collected by the agent was violative of Article 20(1) and Article 31 of the Constitution. In the course of the arguments, this was not pressed. The learned counsel for the petitioners impeached Section 11 (2) of the Act on the ground that it was beyond the competence of the legislature to have enacted Section 11 (2). We do not think that it is permissible for the petitioners to present a fresh point in the course of arguments. Even otherwise, the contention seems to lack substance.
(3) Section 11 is in these words :
'1. No person who is not registered as a dealer shall collect any amount by way of tax under this Act nor shall a registered dealer make any such collection before the 1st day of May 1950 except in accordance with such conditions and restrictions if any as may be prescribed.
Provided that the Government may exempt persons who are not registered dealers from the provisions of this sub-section until such date, not being later than the 1st day of June 1950 as the Government may direct.
2. Notwithstanding anything to the contrary contained in any order of an office or tribunal on the judgment, decree, or order of a Court, every person who has collected or collects on or after lst May 1950 any amount by way of tax otherwise than in accordance with the provisions of this Act, shall pay over to the Government, within such time and in such manner as may be prescribed the amount so collected by him and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue.'
4. What is urged is that the legislative power under Entry 54 of List II of Schedule VII extends only to enact laws taxing transactions of sale or purchase of goods. Thus, the Legislature could enact measures empowering Governments to collect tax only on sales or purchases whereas the impugned section vests authority in the department to recall any amount collected by any person notwithstanding the fact that the collection was made unauthorisedly by such a person and not warranted by the provisions of the Act. It may be mentioned here that! Sub-section 2 was substituted by the Hyderabad General Sales-tax (Amendment) Ordinance 1956. This sub-section before the amendment read as follows:
'Every person who has collected or collects any amount by way of tax under this Act on or after 1st day of May 1950 shall pay over to the Government within such time and in such manner as may be prescribed, all amounts so collected by him if they are in excess of the tax if any paid by him for the period during which the collections were made, and in default of such payment, the amounts may be recovered as if they were arrears of land re-venue.'
5. The amendment made in 1956 was the result of a judgment of Bench of the erstwhile Hyderabad High Court to which one of us (fagan-mohan Reddy, J.) was a party in Cement Marketing Co. v. Krishnamurthy, 1956-7 STC 762; (AIR 1950 Hyd 124). There the sales manager of certain cement companies collected from the customers extra amount towards sales-tax in order to provide against certain contingencies as the Sales-tax Officer was claiming double tax and treated it as deposit pending the decision of the issue whether the supplies made by the Sales Manager involved two sales or only one sale. Subsequently, the appellate Tribunals decided that the sales effected by the Sales Manager could not be subjected to sales-tax. However, the department put forward a claim and required the Sales Manager to remit to the Government the sums provisionally collected by him from the purchasers. In the Writ Petition filed by the Sales Manager; for the removal of this order in certiorari, the learned Judges accepted the contention of the petitioner that Section 11(2) as it stood permitted the Department to collect from any person only what was lawfully leviable us tax under the Act and what were collected without legal authority could not be claimed by the Government.
6. It is to nullify this Judgment that the legislature resorted to the amendment. It may incidentally be mentioned that this object was 1106 achieved and that decision was left untouched. Cases of that description cannot come within the con-potation of the amended section for the reason that besides the tax sought to he recovered, not being lawfully leviable, the person on whom the demand was made for making over the amount did not collect the amount by way of tax but only as deposits to meet the contingency of the Department persisting in double taxation. The petitioners therein collected the amounts on the express understanding that the money had to be refunded to the consumers in the event of their contention being accepted, viz., that the sales in question could not be subjected to tax.
7. We will now proceed to consider the import of the amended Section 11(2) as it stands and whether the legislature had exceeded its powers in enacting this section. What is urged for the petitioners is that item 54 of List II of VIIth Schedule of the Constitution empowered the State Legislature only to make laws authorising the imposition of tax on the sale or purchase of goods other than newspapers etc., whereas this section permits the levy of tax not on sales or purchases but on illegal ex-actions which are not comprehended within that item and consequently the Legislature had gone beyond its competence in making this amendment.
In out considered opinion, this argument is the result of a misconception as to the scope of Section 11 (2). That is not a taxing provision. It only enables the Department to recover all amounts collected by the dealer by way of tax i.e. under the colour of the Act. It imposes an obligation upon dealers to make over to the State on whose behalf they had made the collections, such sums of money as they had collected under the authority of the Act, notwithstanding that such collection was not warranted by the provisions of the Act. No part of the money realised by a dealer from a purchaser belongs to him and it is only by invoking the authority of the Act that the collection is made from the purchaser.
The seller collects the tax because of the obligation that is enjoined upon him by the statute and with a view to pay it to the State and not for his own benefit. The object of the section is to require; such 3 person to remit all amounts collected by him either in excess of tho tax lawfully leviable or tax on sales which are immune from the levy of sales-tax. Such a provision is ancillary to the collection of sales-tax, and is incidental to taxing legislations It indirectly prevents a dealer from making illegal exactions or collecting anything in excess of the tax due and discourages a dealer from enriching himself at the expense of the consumer under the authority of the statute. Consequently, it conies within the ambit of the entry mentioned in item 54.
8. It is a we) 1-recognised principle that the heads of legislation should be interpreted broadly SO as to take in all matters which are of a character incidental to the topics mentioned in the legislative entry. We feel that this comes within the main power conferred by the relevant item upon the State Legislature.
9. In considering whether a statutory provision is within the permissible limits, one has to look at its pith and substance and if that falls within any of the items conferring legislative power, the legislation would be valid. If its object is incidental to the exercise of the main power, such a measure should be upheld notwithstanding the fact that it may incidentally encroach upon the field assigned to another legislature. In State of Rajasthan v. Chawla, : 1959CriLJ660 , it is pointed out by the Supreme Court adopting the dictum of Lord Selborne in Queen Empress v. Burah, (1878) 3 AC 889 :
'....though meant to be mutually exclusive are sometimes not really so. They occasionally overlap and are to be regarded as enumcratio simplex of broad categories. Where in an organic instrument such enumerated powers of legislation exist and there is a conflict between rival lists, it is necessary to examine the impugned legislation in its pith and substance and only if that pith and substance falls substantially within an entry or entries conferring legislative power is the legislation valid, a slight transgression upon a rival list notwithstanding.'
10. Even assuming that entry 54 could not be invoked to sustain it, it looks to us that entry 26 of List II could come to the aid of the Legislature. That entry rests power in the State Legislature to make laws regulating trade and commerce within the State subject. In our view, a provision like this tends to regulate the business of a merchant in regard to the collection of taxes on behalf of the State. The Act requires a dealer to collect the tax from 'the purchaser in the course of his business and, therefore, it is intimately connected with his trade or business. Thus, the offending section can also be brought within the range of entry 26 of List II. When the competence of a legislature is challenged, !t is open to a Court to canvass all legislative heads in support of the powers of the legislature.
11. For all the above reasons, we hold that the impugned legislation is within the competence of the Hyderabad Legislative Assembly and is intra vires its powers, and consequently we uphold the constitutional validity of Section 11(2) as it stood at the relevant time. Therefore, the department was well within its rights when it called upon the assessees in this case to make over what they had collected from the purchasers. Further, it is their representation that the incidents of taxation fell at the sale point! and was payable to Government that induced the purchaser to pay the tax. Had it not been for this, the purchaser would have included it in his turnover and paid the tax to the Revenue thereon. In such a case, this Court Will not he justified in exercising its jurisdiction under Article 226 of the Constitution.
12. W. P. No. 1123 of 1956 is dismissed with costs. Advocate's fee Rs. 100/.
13. Our opinion in W. P. No. 1123 of 1956 governs W. Ps. 745 and 740 of 1938 as the situation is exactly the same in them also. These Writ Petitions are dismissed with costs in W. P. No. 745/58. Advocate's fee Rs. 100/.