TMI Blog1948 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ut that the questions as framed, are not satisfactory. In the first question the Court is asked to say whether or not the sale price as defined in Section 2(h) of the Bengal Finance (Sales Tax) Act, 1941, will include any amount charged and realised separately as "Sales Tax" by the dealer. That is not the way to propound a question. The question should be in my view in this form: "Does the sale price as defined in Section 2(h) of the Bengal Finance (Sales Tax) Act, 1941, include any amount charged and realised separately as sales tax?" In that form the answer of the Court can be in the affirmative or in the negative. An alternative question should not be framed as has been done here. The second question is really a repetition of the first, because if sale price is to include an amount charged and realised separately as sales tax by the dealer, then clearly gross turnover must be ascertained by taking the aggregate of the amounts of sale prices and parts of the sale prices received by the dealer with the inclusion of all amounts charged and realised as sales tax by the dealer during the period in question. The third question is wholly unnecessary and that is realised by the Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such additions being described as the amount of sales tax payable. Mr. Gupta's argu- ment is that that amount shown as sales tax does not form part of the sale price and should not be taken into consideration when the turnover of the assessee is computed. Mr. Gupta had to concede that under the Act the sales tax is not levied on the purchaser and is not collected from the purchaser by the dealer. It is clear that the Act does not contemplate any direct pay- ment of the sales tax by a purchaser. The charging section is Section 4 of the Act. Sub-section (1) of that section provided: "Subject to the provisions of Sections 5 and 6 and with effect from such date as the Provincial Government may, by notification in the Official Gazette, appoint being not earlier than thirty days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act, exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the date so notified; Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the Commissioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addi- tional sum, representing the sales tax payable on such an amount. In their returns to the taxing authorities they merely showed the aggregate of the real sale prices, not the aggregate of the amounts which they had in fact received from the purchasers. Their contention was that what the purchaser paid was not only the sale price of the article, but also the amount of sales tax payable on such a price. That being so, it was said that the amount payable by way of sale price should not be included in their returns showing their gross turnover or totality of their sales. It appears to me that the argument addressed to us by Mr. Gupta on behalf of the applicants which was the contention put forward by the assessees before the taxing authority is quite untenable. The gross turnover must, of course, include the aggregate of the various sale prices charged for the total amount of goods sold during the period in question. The term "sale price" is defined in Section 2(h) of the Act in these terms: "Sale price means the amount payable to a dealer as valuable con- sideration for (i) the sale of any goods, less any sum allowed as cash discount according to ordinary trade practice, but i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, to be called purchase tax, should be charged, subject to and in accordance with the provisions of that part of the Act, on the wholesale value of all charge- able goods bought under chargeable purchases. Section 21 of the Act defines the wholesale value in these terms: "The wholesale value of any goods in respect of which tax is chargeable shall be taken to be the price which in the opinion of the Commissioners the goods would fetch, on a sale made at the time when the tax in respect of the goods becomes due by a person selling by whole- sale in the open market in the United Kingdom to a retail trader carrying on business in the United Kingdom only, if no tax were chargeable in respect of the sale and it were made in the circumstances specified in the Eighth Schedule to this Act." Mr. Gupta's contention was that in the English Act a provision was made to exclude the amount of purchase tax in assessing the wholesale value of any goods. He contended that the same procedure should be followed in India and that in arriving at the sale price for goods, the amount representing the sales tax paid by the consumer to the dealer should be deducted from the total amount paid and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the determining factor is the statutory definition of sale price and the statutory definition of turnover which is the aggre- gate of the amounts of sale prices and parts of sale prices received by any dealer during a given period. Applying those definitions, it may well be that the gross turnover in sub-sections (1) and (2) of Section 4 does not include anything paid as sales tax, whereas it does include such amounts in sub-sections (3) and (4). There is no real difference in the meaning of the term "gross turnover" in any of these sub-sections. It means the aggregate of the sale prices. Obviously, before the Act came into force or before a dealer first became taxable, the sale price could not include anything paid by way of sales tax. On the other hand, after the Act came into force and a dealer became taxable the purchaser would pay an amount over and above the old sale price to recoup the dealer. As I have already said, what the purchaser pays over and above the old sale price to prevent the dealer bearing the burden of the tax is not the tax. It is merely an increase of the pur- chase price, such increase being calculated as sufficient to save the dealer from bearing the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was that it must not be assumed that the legislature intended the dealer to be worse off, but rather it should be assumed that the legislature intended that he should be a little better off as a result of these deductions contemplated in Section 5(2)(b). Mr. Gupta added that probably the legislature con- templated that he should be a little better off by reason of these deductions to compensate him for all the work and inconvenience caused by the levying of this tax. There is no doubt that dealers are put to considerable trouble in keeping their accounts as a result of this taxation, but it appears to me that Mr. Gupta is merely indulging in pure speculation. It is difficult to say why this deduction in Sec- tion 5(2)(b) was allowed. But we cannot assume that it was allowed for the reasons suggested by Mr. Gupta. It appears to me quite clear from the working of this Act that the dealer is the person taxed. If the dealer to save himself passes, as it were, the tax on to the con- sumer, all he does is to increase his price in order that he may be able to pay the tax without loss to himself. The consumer is not taxed under the Act and cannot be made to pay any tax. What he pays as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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