9911796707
TMI Blog1971 (7) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... EGDE, J.-These appeals by special leave arise from the decision of the High Court of Madhya Pradesh in three references under section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 (to be hereinafter referred to as the Act). Those references were made at the instance of the assessee who is the appellant in all these appeals. The question of law referred to the High Court for its opinion in each one of these cases is identical and that question reads: "In the facts and circumstances of the case is the sales tax recovered by the petitioner a part of the sale price as defined in clause (o) of section 2 of the Madhya Pradesh General Sales Tax Act, 1958." Herein we are concerned with the assessment years 1961-62, 1962-63 and 1963-64. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibutes goods to its members or commission agent, a broker, a del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal. "Turnover" is defined thus in section 2(t): "'Turnover' used in relation to any period means the aggregate of the amount of sale prices received and receivable by a dealer in respect of any sale or supply or distribution of goods made during that period, whether or not the whole or any portion of such turnover is liable to tax but after deducting the amount, if any, refunded by the dealer to a purchaser, in respect of any goods purchased and returned by the purchaser within the prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser to pay the tax imposed on the dealer. If the dealer passes on his tax burden to his purchasers he can only do it by adding the tax in question to the price of the goods sold. In that event the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchaser for the goods purchased by him. If that be so, the tax collected by the dealer from his purchasers becomes a part of the sale price fixed, as defined in section 2(o). In some of the Sales Tax Acts power has been conferred on the dealers to pass on the incidence of tax to the purchasers subject to certain conditions. Those provisions may call for different considerations. In the Act there is no such provision except section 7-A which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable by him from his buyer or seller. Whatever collection that may be made by the dealer from his customers the same can only be considered as valuable consideration for the goods sold. In George Oakes (Private) Ltd. v. State of Madras and Others [1961] 12 S.T.C. 476 (S.C.)., this court was called upon to consider whether a dealer can pass on his tax liability as such to his customer. In that decision while rejecting the contention that the tax liability as such can be transferred to the buyers this court referred to the observations of Lawrence, J., in Paprika Ltd. and Another v. Board of Trade [1944] 1 All E.R. 372., and Goddard, L.J., in Love v. Norman Wright (Builders) Ltd. [1944] 1 All E.R. 618. In the former case Lawrence, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or chooses, collect the tax from the purchaser and sometimes by reason of competition with other registered dealers he may find it profitable to sell his goods and to retain his old customers even at the sacrifice of the sales tax. This also makes it clear that the sales tax need not be passed on to the purchasers and this fact does not alter the real nature of the tax which, by the express provisions of the law, is cast upon the seller. The buyer is under no liability to pay sales tax in addition to the agreed sale price unless the contract specifically provides otherwise. See Love v. Norman Wright (Builders), Ltd. [1944] 1 All E.R. 618." From all these observations, it is clear that when the seller passes on his tax liability to the buy ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
