TMI Blog1963 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover. In the view that the respondents had collected sales tax on the transactions of sales effected by them, the assessing authority held that the amount of tax so collected was recoverable from the respondents under section 8-B(2) of the Act. Objection was taken to this demand. The respondents contended before the Appellate Assistant Commissioner that the sales in question were not liable to be taxed at all and that the levy of tax on these goods at the stage of second sale is opposed to law. They claimed further that the collection of tax made by them on the occasions of their sales was not sales tax on the transactions of sales but reimbursement of the sales tax which they had paid to the first sellers. It was urged therefore that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Appellate Assistant Commissioner accordingly held that though the transaction of second sale was not liable to be taxed, the tax was in fact collected by the respondents on such second sale transactions. A further appeal was taken to the Tribunal. The Tribunal came to the conclusion that the respondents had not collected any amount purporting to be by way of sales tax. The Tribunal observed thus: "The question is whether the appellant has collected this 6 per cent. purporting to be by way of sales tax under this Act. It seems to us that he has collected this amount as money which he has already paid for to get the article from the first seller for second sales to his customers. He could very well have consolidated and put it as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 6 per cent. tax on their sale price, which obviously included the tax on the first sale which the respondents had paid already. Notwithstanding that the second sale of auto spare parts is not liable to tax, if the respondents purportedly collected sales tax on the sale price of the goods at which they offered the goods for sale, the argument is that they had really collected tax on this transaction of second sale. It would be instructive to examine some of the bills. Bill No. 6069 dated 15th November, 1958, sets out certain items of sale making a total of Rs. 217. The next entry is "Tax paid to first seller at 6 per cent.-Rs. 13-02 nP." Total Rs. 230-02; "Packing and forwarding charges-Rs. 2-98 nP." Total Rs. 233-00. The question that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.V. Viswanatha Iyer, learned counsel for the respondents, been able to explain how it happens that the tax paid to the first seller is computed at 6 per cent. on the sale price at which the respondents sold the goods. Actually therefore the tax shown as paid to the first seller in these bills exceeded the tax which the respondents must have paid to the first seller. What is however contended by the learned counsel for the respondents is that the respondents did not purport to collect the amount by way of tax, that is to say, that they only purported to collect the tax that had been paid to the first seller and that they did not purport to collect any tax as payable to them as the second sellers. We are not satisfied that this argument h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is due from him under this Act in respect of the transaction in which he has collected or collects such amount, shall pay over to the State Government ..... If the Tribunal thought that under this Act no sales tax was collectable on a second sale of these goods and that the collection was therefore not under this Act, it ignores the other part of the section whereunder the liability to pay over to the State is cast in respect of amounts collected in a transaction which does not admit of the collection of any tax under the Act. The underlying principle of the section is where a dealer purporting to exercise a right conferred upon him to pass on a tax collects an amount which he designates as a tax even when the transaction is not one subje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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