9911796707
TMI Blog1970 (9) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... found 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts by the purchasers with the petitioner in the circumstances stated does not amount to collection of the said amounts "purporting to be by way of tax". The word "deposit" means "entrustment". When a dealer collects any amount professing to be by way of tax, the customer who pays the amount does not deposit the amount with the dealer. The dealer gathers the money as tax. But where the customer in order to meet a contingency deposits any amount with the dealer, there is only the entrustment of the amount and the position of the dealer is in the nature of a trustee for the amount. The taking of deposit by a dealer cannot be construed as collection of any amount by way of tax or purporting to be by way of tax. In our judgment, on the facts f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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