TMI Blog1955 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser, Promar Sales Limited, to the above extent of Rs. 16,06,820 on its second sale of detergent soap (in which it deals and which was taxable only at the point of first sale in the State) to the said purchaser was only as "incidental charges" and that hence the said provision does not get attracted at all. The further contention which is also stressed by learned counsel for the petitioner is that at any rate since the Tribunal has found as of fact that the said collection has been made by the assessee towards tax suffered by it earlier on its purchase from Whitco Limited and since this Court has held in Metal Sales Corporation v. Joint Commercial Tax Officer [1983] 52 STC 392, that such collection does not attract penalty levy under section 22(2) of the Act, the Tribunal erred in confirming the penalty levied. The said learned counsel also relied on the decision in Mather Platt Ltd. v. State of Maharashtra [1983] 53 STC 104 (Bom) and the judgment dated September 21, 1990 in Shree Narasimgasahay Mudungopal Electric Co. Pvt. Ltd. v. State of Tamil Nadu [T.C. (R) Nos. 171 to 175 and 468 of 1981 and 1417 to 1421 of 1984]. 3.. On the other hand, learned counsel for the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, cannot be believed. 4A. Further, the Tribunal also makes the following observations in paragraph 12 of its order: "The sellers to the appellants Whitco Limited have not charged anything by way of incidental charges but the appellants have charged incidental charges which is almost equivalent to the sales tax, surcharge and additional surcharge paid by them to their sellers. From the above it is clear that the sales tax, surcharge and additional surcharge work out to Rs. 13.02 and incidental charges work out to Rs. 14.34 per cardboard box. The sales tax, surcharge and additional tax on Rs. 210 work out to Rs. 14.32 and incidental charges has been calculated at Rs. 14.34. So it is clear that the incidental charges are only the same as the sales tax, surcharge and additional surcharge. The point to be noted is that if they have ultimately collected incidental charges whatever may be the rate it is not a point to be probed into by the department. But, if they have created any impression on the purchasers that they only collected incidental charges whereas they have intended to pass on the tax paid by them that would not be permissible under the Act." So also it is clear that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee along with the reply to the pre-assessment notice, that the abovesaid alleged incidental charges were paid "at the rate applicable to the goods resold" to the abovesaid Promar Sales Limited. (Emphasis* supplied). So, it is clear to us that the alleged incidental charges to the extent of the abovesaid Rs. 16,06,820 are only at the taxable rates applicable to the value of the sales effected by the assessee in favour of the abovesaid Promar Sales Limited, as if those sales were taxable, despite being second sales within the State. The Tribunal also does not disturb, the abovesaid finding of the Appellate Assistant Commissioner that the assessee has collected Rs. 61,897 in excess of the tax it has suffered earlier or the other finding of Appellant Assistant Commissioner that while the assessee paid tax at 6 per cent, surcharge at 5 per cent Here italicised. on tax and additional surcharge at 5 per cent on tax, it collected at 6.6 per cent on its sale value. But the Tribunal proceeds to construe or infer that the assessee made the abovesaid total collection of Rs. 16,06,820 only by way of taxes already suffered and that in that process it has collected the abovesaid sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lection by the assessee was only taxes already suffered by it together with some excess thereon, then [1983] 52 STC 392 (Mad.) (Metal Sales Corporation v. Joint Commercial Tax Officer) is squarely applicable to that portion of the collection, which represents the taxes already suffered and the penalty under section 22(2) could be levied only on the other portion, viz., the said excess. But, in the present case, as we have already held, the total collection of Rs. 16,06,820 made by the assessee, cannot be construed in the way in which the Tribunal has construed it, but the said collection only represents in reality the taxes due on the value of the sales effected by the assessee as if those sales were taxable. If that is so, the other decision rendered by this Court in [1984] 57 STC 72 (Ramasamy v. State of Tamil Nadu) is squarely applicable on the entire collection of Rs. 16,06,820. There a Division Bench of this Court observed thus: "........The assessee in this case put forward a defence that as the Act enables him to pass on the sales tax which he has paid to his seller to the purchaser, he has passed on the amount of sales tax which he has paid at the time of his purchase, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Nos. 7 and 8 of 1989 (Speed-Away Limited v. State of Tamil Nadu [1997] 106 STC 367 supra), the decision of the assessing authority, which was confirmed by the Appellate Assistant Commissioner and the Tribunal, levied penalty under section 22(2) of the Act, only on the excess over tax suffered" on the footing that the entire collection by the assessee therein represented only tax suffered already by the assessee with some excess. As against the said decision confirmed by the Tribunal, the Revenue did not prefer any revision contending that the abovesaid entire collection represented only the tax leviable on the sale effected by the assessee, if it were a taxable sale and that hence the penalty could be levied under section 22(2) of the Act on the said entire collection itself. Only the assessee preferred revision against the abovesaid decision of the Tribunal confirming that of the lower authorities and we saw no reason to interfere with the said decision of the Tribunal therein, under section 38 of the Act. Therefore, we also point out that there is actually no inconsistency between the said our order in T.C. (R) Nos. 7 and 8 of 1989 (Speed-Away Limited v. State of Tamil Nadu [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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