TMI Blog2015 (11) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... amount has been retained. When the goods are exempted from payment of tax, no person irrespective of a dealer, registered dealer or unregistered dealer shall collect tax in respect of goods, which are exempted from tax. The object is to prevent the consumer cheating, by dealers. If such contravention takes place and consumer cheating occurs then the penal provision, of forfeiture and penalty gets attracted. Here, in this case, the petitioner is a registered dealer. The petitioner has paid tax. The goods, in question, are taxable goods. The petitioner has paid tax to its seller, which was not a specified oil company at that time. The petitioner, therefore; has collected tax from its purchasers. The above facts clearly disclose that the petitioner has not committed any contravention of section 65A(1) since the goods, in question, are not exempted goods. Any person cannot collect tax on sale of goods, which is exempted from tax. In view of the clear distinction with regard to the proposition of law that is discernible from the provisions of section 65A(1), it cannot be said that the petitioner has contravened the provisions of section 65A(1). Therefore, the order of forfeitur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to its sellers was recovered from the dealers and some excess tax was also collected. However, the excess tax collected, has been remitted to the Government and there is no appropriation of any amount of excess tax collected from the dealer is retained by the petitioners. It is said that the provisions of section 65A of the AGST Act, 1993 have no application to the facts of the case because, under Sub-section (1) of section 65A the goods purchased are taxable and they are not exempted from tax. Therefore, collection of tax by the petitioner from its dealers cannot be termed as illegal since the petitioner had paid the tax to its sellers. Therefore, the initiation of proceedings and order of forfeiture and levy of penalty under section 65A is bad in law. 3. The Government Advocate, Mr. S Saikia, appearing for the Department strenuously argued that in view of the Explanation 2 to section 8, read with section 65A(3) of the AGST Act, 1993 and rule 12 of the AGST Rules, 1993, the petitioner is not entitled to collect tax from the dealers; therefore, the initiation of proceedings under section 65A is justified in law. 4. The counsel also referred to the decision of the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order as to costs. 5. In view of the above submission, it was strenuously contended that the order passed under section 65A is fully justified and does not call for interference. 6. For convenient reference, the provisions of section 65A, Explanation 2 to section 8 and rule 12 of the AGST Act and Rules are reproduced below:- 65A. Prohibition of collection of excess tax, forfeiture, penalty, etc.:- (1) No person shall collect any sum by way of tax in respect of sales of any goods on Which no tax is payable under the provisions of this Act. (2) No person who is not a registered dealer and not liable to pay tax in respect of any sum by way of tax from any other person and no registered dealer shall collect any amount by way of tax in excess of the amount of tax payable by him under the provisions of this Act. (3) If any person:- (a) not being a dealer liable to pay tax under this Act, collects any sum by way of tax, or (b) being a registered dealer collects any sum by way of tax in excess of the tax payable by him, or (c) otherwise collects tax in contravention of the provisions of sub-section (1),'any sum collected by that person by way of tax in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of such goods or class of goods, the resale of such goods by such person shall be deemed as first point of sale within the State and the rates of tax shall be as specified in Schedule it for such items. (2) The following are the oil companies for the purpose of Explanation 2 under clause (a) of sub-section (1) of section 8 of the Act:- (i) Indian Oil Corporation Limited, (ii) Bharat Petroleum Corporation Limited, (iii) Hindustan Petroleum Corporation Limited, (iv) Bongaigaon Refinery and Petrochemicals Limited, (v) Indian Oil Corporation-Assam Oil Division, (vi) Indo-Burma Petroleum Company Limited (IBP Co. Ltd.). (3) The selling oil company shall obtain a declaration in the following form, from the purchasing oil company in respect of all such sales to the effect that the purchases are for the purpose of resale by the purchasing oil company in Assam which shall be subject to levy of tax under the Act. A single declaration shall be preserved in the counter-foil by the purchasing company and shall be produced before the assessing officer on demand. The declaration to be issued by the purchasing oil company shall be issued serially and chronologically:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if he has willfully contravened the provisions. It may be that under sub-section (3) there is restriction on the person not being a dealer to collect tax and not being a registered dealer not to collect excess tax but for such contravention no penalty is envisaged under sub-section (3). It is only for the contravention of sub-section (1), the order of forfeiture and penalty is contemplated. 10. The dominant object of sub-section (1) of section 65A perhaps is to prohibit collection of tax in respect of sales of any goods on which no tax is payable. In other words, when the goods are exempted from payment of tax, no person irrespective of a dealer, registered dealer or unregistered dealer shall collect tax in respect of goods, which are exempted from tax. The object is to prevent the consumer cheating, by dealers. If such contravention takes place and consumer cheating occurs then the penal provision, of forfeiture and penalty gets attracted. Here, in this case, the petitioner is a registered dealer. The petitioner has paid tax. The goods, in question, are taxable goods. The petitioner has paid tax to its seller, which was not a specified oil company at that time. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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