TMI Blog2016 (3) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... r of appellant. - Civil Appeal No. 5899 of 2006 - - - Dated:- 14-3-2016 - A. K. Sikri And Rohinton Fali Nariman, JJ. ORDER The appellant herein is engaged in the business of manufacture and sale of paints and is registered as a dealer under the provisions of Karnataka Sales Tax Act, 1957 (hereinafter referred to as 'KST Act'). It has been paying entry tax under the provisions of Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred to as 'KTEG Act') as well. In relation to the sales tax assessment under the provisions of KST Act for the periods 1992-1993 and 1993-1994, the appellant had claimed that entry tax amounts collected separately from the customers in the sale bills and paid to the Government wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gument urged on behalf of the appellant is that when a dealer who in this case happens to be a commission agent is permitted by law to collect the market fee which he is liable to pay to the market committee from the purchaser, such market fee cannot form part of the consideration for sale and, therefore, cannot be included in the turnover of purchases for purposes of levy of tax under the Act. But on behalf of the State Government, it is urged that all sums paid by a purchaser to a seller or to a commission agent for the purchase of the goods including any tax or fee payable by him form the consideration for the purchase and, therefore, are liable to be included in the turnover of purchases. Reliance is placed by the State Government on M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n both the decisions referred to above, this Court relied upon Paprika Ltd. v. Board of Trade and Love v. Norman Wright (Builders) Ltd. in which it had been laid down that the price payable by a purchaser under a contract of goods for the purpose of certain penal provisions was the price fixed by the contract and a seller who wished to recover the amount of the purchase tax should, except where an adjustment was authorised by statute, include that amount in the price so fixed. From the observations made in the decisions referred to above, it follows that where a dealer is authorised by law to pass on any tax payable by him on the transaction of sale to the purchaser, such tax does not form part of the consideration for purposes of levy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, on the construction of Section 3A of the KTEG Act, it has taken a view that since this section is couched in a negative term, it does not authorise the registered dealer to collect the entry tax. This construction is clearly erroneous as the embargo is put only on such dealers which are not registered dealers, meaning thereby, those who are registered dealers are authorised to collect the entry tax. That becomes further clear from the latter portion of sub-Section (1) of Section 3A which permits the registered dealers to collect the tax but bars them from collecting the tax exceeding the rates or rates specified in a notification issued under Section 3 of the Act. In fact, we are not even required to go into this discussion in greater d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall exact by way of tax any sum exceeding what is payable under the Act. Of course, one who is not a registered dealer, cannot collect any sum by way of tax from any other person. In short, there is a triple taboo writ into S.46. This prohibitory project is made operational, as stated earlier, by two other provisions, one sounding in criminal and the other in departmental proceedings. In view of the aforesaid position in law, when it is found that the appellant is a registered dealer, it would entail him to collect the entry tax and such an entry tax cannot be treated as forming part of the turnover. We, thus, allow this appeal and set aside the impugned judgment. No orders as to costs. - - TaxTMI - TMITax - CST, VAT & Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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