TMI Blog1967 (5) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer or a member of the family of the manufacturer? (2) Whether or not it was legal to treat the sales tax collected separately by a registered dealer from customers to whom he sold goods as part of sale price?" 2. The assessee is a dealer in foot-wear. During the assessment proceedings for the period Ist April, 1961, to 31st March, 1962, the assessee claimed deduction in the sum of Rs. 56,492.31 on the ground that this sum represented the sale price of foot-wear purchased from local manufacturers and that such sales were exempt from sales tax under entry 5 of the First Schedule. This claim was negatived by the departmental authorities, and the Sales Tax Tribunal also agreed with the departmental authorities. The Sales Tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir. The assessee also claimed that he purchased the foot-wears from the manufacturers themselves. Thus according to the assessee, all the three conditions mentioned in column 3 were satisfied and the foot-wears thus being tax-free, their sale by the assessee could not attract sales tax. The heading of section 10 no doubt is "tax-free goods" but that is an inappropriate heading and cannot control the substantive provisions of section 10 as shown hereinafter. 4.. Sales tax has been imposed under entry 54 of the Second List of the Seventh Schedule to the Constitution. That entry authorises the State Legislature to impose tax on the sale or purchase of goods. The taxing event is thus the sale of goods. The tax is not on goods as such as is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t liable to tax, the subsequent sale made by the assessee could not attract the tax liability. This contention is not correct. Under the scheme of the Sales Tax Act, every dealer, whose turnover exceeds the specified quantum during the year, is liable to pay sales tax on all the sales subject to the deductions allowed under the Act. In other words, every dealer is made liable to pay tax on his taxable turnover. "Taxable turnover" is defined as under: "............. (r) 'taxable turnover' in relation to any period means that part of a dealer's turnover for such period which remains after deducting therefrom- (i) the sale price of goods declared tax-free under section 10 or section 12; (ii) the sale price of goods on which tax is paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description of goods. Rate of tax. Points of levy. * * * * 40. All kinds of leather goods and foot-wears of all kinds excepting those exempted under entry 5 of Schedule I. 7 per cent. On the point of first sale in the State by a dealer liable to tax. This entry exempts and excludes "foot-wear" exempted under entry 5 of Schedule I. But, if entry 5 is not attracted vis-a-vis a dealer, as in this case, he will certainly be liable to pay the tax. Again, column 4 makes it clear that tax is to be paid on the point of first sale qua a dealer liable to pay tax. The manufacturer, from whom the assessee purchased the foot-wear, was not liable to pay tax. The sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to be taken into account while arriving at a dealer's taxable turnover; and that there is no provision in the Act which constitutes a dealer an agent of the Government, nor is there anything in the Act which says that the tax is to be recovered from the purchaser. The provisions of the M.P. General Sales Tax Act, 1958, are similar to the provisions of the C.P. and Berar Sales Tax Act, 1947, and the same reasoning is applicable in this case also. 10.. A similar matter came up for consideration before the Supreme Court in George Oakes (Private) Ltd. v. State of Madras[1961] 12 S.T.C. 476. Their Lordships referred to the decision in Paprika Ltd. and Another v. Board of Trade[1944] 1 All E.R. 372., wherein it was observed by Lawrence, J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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