TMI Blog1976 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 1968-69 ? 2. Whether, on the facts and in the circumstances of the case, a sum of Rs. 32,846 is allowable as an admissible deduction as sales tax payable by the assessee under the Andhra Pradesh General Sales Tax Act for the assessment year 1968-69 ?" Similar questions have been posed in three other references. The assessee in all these referred cases are merchants carrying on business in jaggery as commission agents. The assessment years for which they were assessed are 1968-69 and 1969-70. They had collected sales tax from the purchasers but had neither deposited the sales tax with the sales tax authorities nor had paid the amounts so collected to their principals. The assessee claimed that the amounts of sales ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the assessees, contends that the department was incorrect in not giving retrospective effect to sections 5 and 11 of the Act of 1970. According to him, it might be correct that there was no liability on the assessees to pay sales tax for the relevant assessment years in view of the judgment of the High Court, but the Act of 1970 had placed the liability on the assessees to pay sales tax for the relevant years. Although the amended Act was passed in 1970, it was to take effect from April 1, 1963. He submits that in these circumstances the sales tax collected by the assessee during the relevant period cannot be treated as trading receipts as the assessees are bound to pay sales tax so collected to the sales tax authorities. In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 615 (SC) and Badri Narayan Balakishan v. Commissioner of Income-tax [1965] 57 ITR 752 (AP). In order to appreciate the contentions of the respective advocates, it is necessary to state the relevant provision of the sales tax law is they stood during the assessment years, and the subsequent amendments passed by the State Legislature. Under section 11(1) of the Andhra Pradesh General Sales Tax Act, 1957, the position was that the commission agents who took out licence and conformed to its conditions were not liable to pay sales tax. But in 1963, Act XVI of 1963, was passed substituting section 11(1) of the 1957 Act as it stood hitherto, and provided that an agent of a resident principal should be assessed to tax or penalty for the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upheld the amendment and that judgment was confirmed by the Supreme Court. An appeal in Jonnala Narasimharao Co. v. State of A.P. [1971] 28 STC 262. Therefore, the position of law as it stands now is that if a commission agent who is a dealer under section 2(e) of the Sales Tax Act of 1957, had already collected the sales tax, though at first illegally, it had become legal by virtue of the Amendment Act of 1970, and as a dealer he was liable to pay that amount to the sales tax authorities in respect of the assessments made. This is what was held by the Supreme Court in Jonnala Narasimharao's case [1971] 28 STC 262. Hence in the instant cases, the sales tax which was collected illegally by the assessees during the relevant period became ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 737, it was held by the Supreme Court that a court of appeal in an appeal properly before it must give effect to the law as it stood, if the law has at some stage anterior to the hearing of the appeal been amended retrospectively. In Commissioner of Sales Tax v. Bijli cotton Mills [1964] 15 STC 656; AIR 1964 SC 1594, 1597, it was observed by the Supreme Court as follows : " The legislature has, however, amended the Act and has declared that notwithstanding the option exercised by the assessee the. tax would have to be computed in the light of the rates prevailing in 1948-49 as if they were projected upon the turnover of the previous year. The legislature has expressly stated that this rule will prevail as if it were in force during the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected by the assessees as sales tax are also not allowable as admissible deduction. In case the assessees have paid the sales tax to the concerned authorities, they would be at liberty to claim deductions of the amounts as and when they pay to the sales tax authorities. The reason for coming to the above conclusion is that it is now well settled that the collection of sales tax on a transaction of sale is part of the price, because the liability to pay sales tax is on the dealer and the dealer can pass on his tax burden to his purchaser by adding sales tax to the price of the goods sold. When such is the case, the price of the goods sold including the tax payable becomes valuable consideration and therefore, the sales tax collected by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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