TMI Blog1954 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1952 may be taken as typical of the facts in the other cases. The assessee in the case in one Krishnaswami Mudaliar and Sons, dealers in timber and piece-goods at Vellore. His turnover was assessed at Rs. 27,38,901-1-10 for the assessment year 1948-49. The assessee objected to the inclusion of a sum of Rs. 39,759-13-1 in the turnover of his business as it represents the amount of tax which he collected from the consumers and paid over to Government. The decision of the depart- ment was against the assessee; he succeeded in convincing the Tribunal that his claim was well-founded. The Government have filed these petitions against the orders of the Tribunal. Under the Madras General Sales Tax Act, a registered dealer is empowered to col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale price agreed upon between the parties but also in addition to it the tax which the dealer could be called upon to pay in respect of such transaction, the only authority in that event for the unregistered dealer to add the tax to the price is that he thereby makes it part of the sale price for which the goods were agreed to be sold. In such an event, undoubtedly, it would be open to the purchaser, that is the consumer, either to accept the bargain in the manner stipulated by the unregistered dealer, or to refuse to accept the bargain. In cases in which an unregistered dealer adds to the sale price, the amount equal to the tax which he would be liable to pay to the Government it would undoubtedly be part of the sale price as it is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribes the nature of the collection which he is permitted to be made by a registered dealer as a tax, and the amount which he is permitted to collect is also determined in the same manner as tax which he has to pay on his turn- over, it is impossible to treat such a collection as part of the purchase price. The fact that, if there is default in paying the amount to the Government, it could be collected as arrears of land revenue, and that he is also liable to prosecution under Section 15 of the Act, undoubtedly would show that the payment is not part of the purchase price but retains its character as tax. The rules relating to the turnover and assessment make the position clear. Under the Act, (Section 3), which is the charging section, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3 the tax is assessed on the turnover. Having regard to the scheme of the Act, therefore, and the rules relating to the turnover and assessment, it is impossible to treat the tax collected by the registered dealer as part of the purchase price. Reliance was placed by the learned Government Pleader upon a decision of the Calcutta High Court in what is known as the Bata Shoe case (Bata Shoe Co., Ltd. v. Board of Revenue, West Bengal(1)). Under the Bengal Act, unlike the Madras Act, there is no provision correspond- ing to Section 8-B of the Madras Act permitting a registered dealer to collect the tax from the consumer. One has to remember that the policy underlying the Madras Act is that, though a registered dealer is liable directl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Justice observes: "If the dealers were authorised to collect the sales tax from the purchasers, then the sale price would clearly be the amount paid less the sales tax; but the total amount paid by the buyer in the present case must be the sale price. It is the consideration payable in respect of the article sold. The total amount paid cannot be split up. As I have said, the purchaser is not liable to pay the sales tax and the same cannot be levied upon him by the dealer. What actually happens is that the dealer in passing on his liability to the purchaser, increases the price of the article by the amount payable as tax on such a sale. He does not levy a tax on the purchaser or collect a tax from the purchaser. What he does is to increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Madhya Pradesh State in Jethalal Virajlal v. State of Madhya Pradesh(3). The provisions of the Acts in those two States were also similar and were analogous to the provisions of the Bengal Act, and therefore the principles of these decisions will not help the learned Government Pleader and support his argument. The case more in point, in our opinion, is the decision of the Travancore High Court in Velayudhan v. Agricultural Income-tax and Sales Tax Officer(4), where Subramania Aiyar, J., deals with an Act which contains provisions analogous to those of the Madras Act. It is no doubt true that in that State there is a specific rule directing the exclusion of the tax collected from the turnover. But in our opinion that does not make ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
