TMI Blog1970 (3) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipals. At the time of making the assessment for the period from 5th November, 1964, to 24th October, 1965, the petitioner objected to the levy of sales tax on the turnover of sales of chillies effected as commission agents of agricultural producers. The assessing authority rejected the objection on the ground that the assessee had not filed a list of its principals alleged to be agriculturists and that it had merely asserted that they were agriculturists. On appeal preferred by the petitioner to the Deputy Commissioner of Commercial Taxes, the objection of the petitioner was accepted and the turnover in dispute was exempted from sales tax. Under the Act sales by agriculturists of their agricultural produce is not taxable whether sale is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 18-A is valid, it is urged that the condition precedent to the exercise of jurisdiction under section 18-A is non-existent in the instant case since on the facts stated in the impugned notice there is no contravention of section 18(1) of the Act. In the view which we propose to take, it is unnecessary to deal with the contention that section 18-A is unconstitutional. In our opinion, the petitioner is entitled to succeed on the ground that the provisions of section 18-A are not attracted as there is no contravention of the provision of sub-section (1) of section 18 of the Act. Section 18-A inserted by Mysore Act 7 of 1966 with retrospective effect reads thus: "18-A. Penalty for collection in contravention of section 18.-If any pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strictions, if any, as may be prescribed: Provided that the amount which may be collected by way of tax shall not exceed the rate or rates of tax specified in respect of the sale or purchase of goods under this Act..........." Sub-section (1) of section 18 consists of two parts, both of which are put in the negative form. We are concerned with the second part which deals with a registered dealer. The second part, in effect, means nothing more than that a registered dealer can make collections of such tax only as is payable by him in accordance with the restrictions and conditions as may be prescribed. If the transaction is not exigible to tax, or where a dealer is not liable to pay any tax on the transaction and as such is not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not amount to the contravention of any provisions of section 14-A as such. The principles laid down in The State of Bihar v. H.R.M.L. Jute Mills[1960] 11 S.T.C. 17. were followed by this court in M. Kuppuswamy Naicker v. Commercial Tax Officer, First Circle, Bangalore and Another[1963] 14 S.T.C. 894. while dealing with sub-section (3) of section 18 as it was in force before 1963. This Court held that the collection which is not made by way of tax is outside the scope of section 18(3) and therefore the penalty of forfeiture cannot be imposed upon a dealer under the proviso to the said section and that in order to impose the penalty of forfeiture it must be shown that the dealer has acted contrary to the conditions and restrictions prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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