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2015 (11) TMI 937 - HC - VAT and Sales TaxForfeiture of taxes collected by Petitioner - Collection and remittance of tax illegally - Penalty u/s 65 under Assam General Sales Tax Act, 1993. - Held that:- Transaction between the petitioner on the one part and the Oil India and Gas Authority on the other, does not constitute a transaction of sale and purchase between the two oil companies for the periods, in question, because the Oil India and Gas Authority are declared to be oil companies only with effect from October 21, 2002. Prior to that, the Oil India and Gas Authority were not specified oil companies. The purchases made by the petitioners from the said two entities, cannot be treated as purchase from the oil companies; therefore, the question of exemption of tax did not arise. Accordingly, the petitioner paid the tax as per Schedule II of the Act. When the petitioner effected sale to its sellers, the petitioner collected the sales tax by way of reimbursement and some excess amount was collected. The excess amount, so collected, has been remitted to the Government and no part of the excess amount has been retained. When the goods are exempted from payment of tax, no person irrespective of a dealer, registered dealer or unregistered dealer shall collect tax in respect of goods, which are exempted from tax. The object is to prevent the consumer cheating, by dealers. If such contravention takes place and consumer cheating occurs then the penal provision, of forfeiture and penalty gets attracted. Here, in this case, the petitioner is a registered dealer. The petitioner has paid tax. The goods, in question, are taxable goods. The petitioner has paid tax to its seller, which was not a specified oil company at that time. The petitioner, therefore; has collected tax from its purchasers. The above facts clearly disclose that the petitioner has not committed any contravention of section 65A(1) since the goods, in question, are not exempted goods. Any person cannot collect tax on sale of goods, which is exempted from tax. In view of the clear distinction with regard to the proposition of law that is discernible from the provisions of section 65A(1), it cannot be said that the petitioner has contravened the provisions of section 65A(1). Therefore, the order of forfeiture and penalty is bad in law. The same is set aside. If any excess tax is collected by the petitioner, retained by him and not remitted, the assessing authority can verify and see that the excess tax collected and retained be collected by the Department. - Decided in favour of assessee.
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