TMI Blog1972 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... id sums collected as mahimai were not part of the sale proceeds. But his contention was overruled on the ground that the amounts collected were part of the sale consideration and that, therefore, they formed part of the taxable turnover, as there is no provision either in the Act or in the Rules giving a deduction for that amount. It is not in dispute that the amounts collected as mahimai formed part of the sale invoices issued by the assessee, though they were shown separately. According to the assessee, the definition of "turnover" in section 2(r) of the Tamil Nadu General Sales Tax Act will not include the collections of this kind, as this was not the subject-matter of a bargain between the parties, and it is a voluntary payment made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fuse to perform the agreement if dharmada was not paid. It appears to be a willing charge paid by the buyer in addition to the valuable consideration for the transfer of property. We are, therefore, inclined to hold on the material on record that it cannot be included in the sale price." In Srinivasa Timber Depot v. Deputy Commercial Tax Officer[1969] 23 S.T.C. 158., the scope of explanation (2) to section 2(r) of the Madras General Sales Tax Act, 1959, was considered and it was pointed out therein that what could be legitimately brought to tax under the Act is the aggregate sums of consideration for the transfer of property in the goods. In Spencer Co. v. Joint Commercial Tax Officer[1969] 24 S.T.C. 161., the question arose as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y tax after making such deductions from his total turnover and in such manner as may be prescribed. If the mahimai collections made formed part of the aggregate amount for which the goods are sold by the assessee it will come under the definition of "turnover" and unless there is any specific statutory deduction available either under the Act or under the Rules it will fall within the definition of "taxable turnover". In George Oakes (Private) Limited v. State of Madras[1961] 12 S.T.C. 476 (S.C.)., the Supreme Court has observed: "Under the definition of turnover the aggregate amount for which goods are bought or sold is taxable. This aggregate amount includes the tax as part of the price paid by the buyer. The amount goes into the common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler. If the dealer passes on his tax burden to his purchasers he can only do it by adding the tax in question to the price of the goods sold. In that event the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchaser for the goods purchased by him. If that be so, the tax collected by the dealer from his purchasers becomes a part of the sale price fixed, as defined in section 2(o)." In that case, the following passage of Lawrence, J., in Paprika Ltd. and Another v. Board of Trade[1944] 1 All E.R. 372., has been quoted with approval: "Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s considered by a Full Bench of the Andhra Pradesh High Court. Dealing with the effect of the amendment it was observed: "The ultimate economic incidence of the sales tax is on the consumer or the last purchaser and whatever he pays for the goods is paid only as price, that is to say, as consideration for the purchase. The statutory liability, however, for payment of sales tax is laid on the dealer on his total 'turnover' whether or not he realises the tax from the purchasers. Generally speaking, the price charged by the dealer would be inclusive of sales tax, for, it is to his interest to pass the burden of the tax to the purchaser. So far as the dealer is concerned, the payment of a sum covering the tax made by a purchaser on the occasi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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