TMI Blog1987 (1) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by this Court at the time of granting the interim stay. The sales tax authorities may recover the amount due by encashing the bank guarantee as also by effecting recovery in accordance with law. - C.A. 1118 OF 1981 - - - Dated:- 9-1-1987 - THAKKAR M.P. AND SINGH K.N. JJ. Dr. Y.S. Chitale, Senior Advocate (T.V.S.N. Chari, Advocate with him), for the respondents. A. Subba Rao, Advocate, for the appellants. -------------------------------------------------- The judgment of the Court was delivered by M.P. THAKKAR, J.- In a batch of writ petitions and T.R.C. cases before the High Court the question raised in substance was formulated as under: "The question, therefore, that arises in both these cases, is whether the amount collected by the seller from the buyer which comprises of the two components the actual sale price and the sales tax is a part of the 'turnover' and comes within the expression 'any other sum charged by the dealer whatever be the description, name or object thereof' occurring in the definition in section 2(s) Section 2(s) of the Andhra Pradesh General Sales Tax Act, 1957: of the Act. In the former case it is shown expressly as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livery of the goods. (ii) wherein the sales tax is not mentioned in the bill at all but simultaneously collected with the delivery of the goods separately under debit notes whereby the exact amount of sales tax due is collected from the purchaser by the seller but the said amount is kept in the suspense account. The submissions which were unsuccessfully urged before the High Court and are reiterated before us on behalf of the assessees are: 1.. That where the amount is collected specifically as "tax", it cannot be deemed to be a part of the consideration for the sale of the goods and as such it cannot form part of the turnover within the meaning of section 2(s) of the Act. 2.. Inasmuch as the Act does not prohibit the dealer to pass on the sales tax component of the sale price to the purchaser, the dealer should be deemed to be an agent of the Government for collecting the sales tax amount. In repelling the aforesaid contentions, strong reliance was placed by the High Court on its Full Bench decision in Government of Andhra Pradesh v. East India Commercial Co. Ltd. [1957] 8 STC 114 (FB) wherein an earlier decision of a Division Bench [State of Andhra Pradesh v. Bujranga J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay from his own property and not from any property earmarked for that purpose from out of the collection of tax made from the buyers. (6) The dealer is no doubt required to deposit along with sales tax return periodically the amount of tax due on the sales effected by him. But that is merely a convenient mode of discharging his liability at the intervals as enjoined by the Act. It is neither linked nor dependent on recovery if any made by him from the buyer (which he may or may not make). (7) The dealer is not paid any remuneration or reward for collecting the sales tax. If he was acting as an agent, the State would be obliged to pay him some remuneration or reward for the State cannot oblige him to work as its agent gratis. It would amount to forced labour if it were otherwise. The aforesaid factors viewed cumulatively make it evident that a dealer who sells the goods does not act as an agent for the State in collecting the sales tax from the persons to whom he sells the goods. If he was acting as an agent he would be required to take reasonable care of the sale proceeds as a bailee. He would also be required to set apart the same without intermingling with his own money, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in in the context of the investment made by him, he would also take into account the factor that he would have to pay sales tax on the turnover having regard to the statutory liability imposed on him by the Act. That however does not mean that what he is charging from the vendee is the tax and not a part of the sale price. So also it would not mean that he has been acting as an agent for Revenue. Nothing would turn on whether the bill or voucher issued to the vendee is so made out to show that the sales tax is charged separately. If he does so he would be doing so only for the sake of his accounting purposes and convenience. The consideration obtained by him from the vendee would in the eye of law be the sale price regardless of what nomenclature is given to a part of the price charged by him. Thus there is no substance whatever in the contention that the sales tax component included in the sale price is not includible in making the aggregate for the purpose of the turnover, it being a tax recovered from the purchaser and not the price of the goods charged to the vendee. What is more, in George Oakes P. Ltd. v. State of Madras [1961] 12 STC 476 (SC) this Court had an occasion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case the amount in question is charged or recovered by the sellers from the buyers whether it is mentioned as sales tax or not. The principle laid down in McDowell's case [1977] 39 STC 151 (SC); AIR 1977 SC 1459 cannot be applied to the fact-situation in the present case. In fact in McDowell's case [1977] 39 STC 151 (SC); AIR 1977 SC 1459 the Full Bench decision of the Andhra Pradesh High Court Government of Andhra v. East India Commercial Co. Ltd. [1957] 8 STC 114; AIR 1957 AP 83 has been noted with approval in paragraph 17 of the judgment. It was further argued by learned counsel for the appellants drawing inspira- tion from Anand Swarup Mahesh Kumar v. Commissioner of Sales Tax [1980] 46 STC 477 (SC); (1980) 4 SCC 451 that the matter requires reconsideration in the light of the observations made therein. We are unable to accede to this submission. In Anand Swarup Mahesh Kumar's case [1980] 46 STC 477 (SC); [1980] 4 SCC 451 this court was concerned with the "market fee" collected by a dealer from the purchaser for being passed on to the market committee under U.P. Act No. 25 of 1964. It was an amount which the statute authorised the dealer to collect from the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the position that the includibility must turn on the question as to whether or not the tax is recoverable from the purchasers under a statutory obligation. This decision cannot therefore be of any avail to the appellants inasmuch as there is no such statutory provision in the Act with which we are concerned. Lastly, it was argued that in the second category of cases where the sales tax was not included in the bill and was kept in the suspense account by the seller, it could not be included in the total turnover. This fallacious argument was rightly negatived by the High Court for the obvious reason that the amount includible in the turnover on the true interpretation of the relevant provisions cannot become excludible merely by reason of the accountancy device adopted by the assessee concerned. There is no substance in any of the contentions urged on behalf of the appellants. The view taken by the High Court is unexceptionable. The appeals fail and are dismissed. The interim orders shall stand vacated. The appellants- assessees will be liable to pay the amount due as sales tax along with interest thereon at 12 per cent as per the condition imposed by this Court at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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