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TMI Blog2011 (1) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of tax prescribed was 50 per cent. However, it was reduced to 15 per cent by the Notification dated May 5, 1997. According to section 5(iii)(a) which is the charging section, the tax is levied on the said products. The assessee paid tax at 15 per cent for the assessment year 1997-98. It is the case of the assessee that when he paid the tax, he was not charging and securing tax from its customer on its sale invoice. The books of account maintained by him also do not show any collection of taxes. However, the sales tax was enumerated at the prescribed rate and remitted regularly out of the sale consideration received. For the assessment year 1997-98 he has declared the sales turnover of gutkha at Rs. 57,38,674 in his monthly and annual returns at 15 per cent. He has paid a sum of Rs. 8,60,801 as tax. The assessment order came to be passed on February 8, 1999 accepting his return. The said exemption of sale tax was the subject matter of challenge before the apex court. The apex court in the case of Kothari Products Ltd. v. Government of Andhra Pradesh reported in [2000] 119 STC 553 held that, "gutkha was a tobacco product and the State Government did not have th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is liable to be forfeited to the Government. Consequently, the application filed by the assessee for refund of wrongly collected tax was directed to be disposed of by the Deputy Commissioner of Commercial Taxes in terms of his order. Aggrieved by the said order the assessee is before this court. The learned counsel appearing for the assessee assailing the impugned order contends that there is no material on record to come to the conclusion that the assessee has collected the tax from the consumers or has passed on the liability of tax to the customers. When admittedly the assessee has paid the tax wrongly he is entitled to refund of the same and forfeiture of the said amount is impermissible. In coming to the conclusion that the assessee has passed on the tax liability to the customers the Commissioner has relied on extraneous materials which is improper. Assuming that such extraneous material was relevant and the said material discloses that the assessee has passed on the liability of tax to the customers, the appropriate order the Commissioner was expected to pass is to set aside the assessment and remand the matter to the assessing authority so that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sibility it is not in dispute that the assessee has promptly paid the tax at the rate of 15 per cent for the sale of pan parag to the Government for the year 1997-98. The total turnover of this product for the year 1997-98 is Rs. 57,38,674. As against the said sales turnover he has remitted a sum of Rs. 8,60 801, in this regard to the Government. The said demand was made on account of the statutory liability imposed on him. The said amendment was challenged by other dealers and the apex court in the case of Kothari Products Ltd. v. Government of Andhra Pradesh reported in [2000] 119 STC 553 held that the said registered dealer had no obligation to impose the sales tax on the said product as additional excise duty was being levied by the Central Government on the said product and therefore the said tax was not payable or liable to be paid by the assessee. In view of the afore- said judgment the assessee filed an application for rectification of the assessment order which was allowed. It is thereafter the proceedings were initiated by the Department for forfeiting the said amount on the ground that the assessee has wrongly paid the said tax to the Government, as she has collected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of the order of forfeiture. On receipt of any such application, the Commissioner shall hold such inquiry as he deems fit and if the Commissioner is satisfied that the claim is valid and admissible and that the amount so claimed as refund is actually paid or recovered, he shall refund the amount or any part thereof, which is found due to the person concerned. (5) Where any amount is collected by way of tax or purporting to be by way of tax in contravention of section 18 at any time before the commencement of the Karnataka Sales Tax (Amendment) Act, 1992, the provisions of sub-sections (3) and (4) shall apply to such amount collected." Nowhere in the section it is stated that if the assessee has collected the tax on the bills, then only the said amount is liable to be forfeited and is not entitled to refund. The words "on the bills" on which the reliance is placed by the Deputy Commissioner did not find a place in section 18AA of the Act. In fact he has virtually re-written the section. It is in these circumstances as the said order was prejudicial to the interest of the Revenue, the Commissioner by virtue of the power of revision conferred under the statute issued a noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,674 and tax at 15 per cent is worked out at Rs. 8,60,801." The material on record clearly establishes that though in the account books maintained by the assessee it has not bifurcated the value of the goods and the tax payable, it is mentioned in the said accounts that the tax payable for the turnover is at Rs. 8,60,801. There is no indication in the said books, that wantonly the assessee has not collected the said tax from the customers. The second material on which reliance was placed by the Commissioner is at para 22 which reads as under: "While deciding similar requests for refund of wrongly collected tax on gutkha, it has come to the notice of this office that in the said years, the sachet of pan parag gutkha contained a printed statement that the price was inclusive of all taxes. So, a consumer while purchasing gutkha from the retailer would have purchased it consciously and well knowing that the price is inclusive of all taxes." This discloses that the assessee not being a manufacturer and only a dealer has sold the sachet which contains an express statement that the price was inclusive of all taxes. Therefore, the purchaser has paid the price plus the tax. If while rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was inclusive of tax component. From the aforesaid material we are satisfied that the finding recorded by the Commissioner is based on legal evidence, in accordance with law and do not call for any interference. It was nextly contended that if the Commissioner wanted to take note of this extraneous material he should have set aside the order and remitted the matter back to the assessing officer for fresh consideration giving the assessee an opportunity to controvert those extraneous material. In which event if the assessee was aggrieved by the order of the assessing officer had a right of first appeal, second appeal and then revision to this court and such a legal remedy is now taken away by the Commissioner. We do not see any substance in the said contention. It is not a case of assessment or reassessment. The facts are not in dispute. The only question is though the assessee has paid the tax wrongly has she collected the tax from the customers? The Commissioner is vested with the power to interfere with the order passed by the Deputy Commissioner of Commercial Taxes if it is prejudicial to the interest of the Revenue and that is precisely what he has done. Once he records a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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