1970 (9) TMI 90

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....ound by the first respondent there has been no contravention of sub-section (1) or (2) of section 18 of the Act and consequently the levy of penalty is illegal. In order to appreciate the contention, the material facts which are not in dispute may be briefly stated: The petitioner is a commission agent dealing in chillies besides other goods. The petitioner sells the chillies supplied by his principals, who are agriculturists. Though the sales by a commission agent of agricultural produce supplied by agriculturists for sale are not exigible to tax under the Act, the petitioner was assessed to sales tax on the turnover of chillies sold during the year 1966-67. That order of assessment was taken up by the petitioner in appeal to the Deputy Co....

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....non-exigibility to tax of the sales turnover and also that there is no contravention of section 18. The first respondent overruling the objection of the petitioner passed an order on 1st September, 1969, imposing a penalty of Rs. 4,915. The said order states that the petitioner during the relevant period had collected the sum aforesaid as deposit on the sale of chillies effected on behalf of the grower principals. But, such collection in the opinion of the first respondent amounts to collection of an amount by way of tax or purporting to be by way of tax. In V.B. Patil v. The Commercial Tax Officer, Haveri, and Others[1970] 25 S.T.C. 449., we have held that if a transaction is not exigible to tax or when a dealer is not liable to pay tax o....