DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM SPECIAL LEAVE PETITION Vs. M LEKSHMANA REDDIAR

JUDGEMENT

(1.) THE Revenue is the revision-petitioner. THE respondent is an assessee under the Kerala General Sales Tax Act, 1963. THE matter relates to the assessment year 1979-80. THE respondent/registered dealer is doing business in molasses. THE short question that arises for consideration, in this tax revision case is whether the dealer is entitled to deduction of sales tax collected. THE assessing authority as well as the first appellate authority held that the dealer collected a lump sum amount and the tax collected is not shown separately in the sale bills. THE deduction pleaded was refused. THE entire amount collected as per the sale bills was considered as the value of the goods and brought to tax. In second appeal, the Sales Tax Appellate Tribunal notices the sale bills issued by the dealer, wherein it is stated, at the bottom, specifically as follows : "including sales tax". THE Tribunal also adverted to the ledger produced by the dealer, wherein the dealer has bifurcated the price of the goods and the sales tax. THE Appellate Tribunal found that from the records produced, it is evident that the sale price collected includes sales tax also. According to the Appellate Tribunal, though the sales tax is not separately shown in the sale memos, the sale memos definitely indicated that the price is inclusive of sales tax, and the accounts produced also show that a proper bifurcation of the sale price and the sales tax has been made. In this view, the dealer/assessee was held entitled to the deduction claimed. THE Appellate Tribunal also referred to its earlier order in T. A. No. 683 of 1981 dated May 22, 1984, wherein a similar view was taken by the Appellate Tribunal, and held that there is no reason to deviate from the above Tribunal decision, rendered long ago. It is thereafter, the Revenue has come up in revision.

(2.) WE heard counsel for the Revenue, the Special Government Pleader (Taxes) Shri N. N. Divakaran Pillai. Rule 9 (1) of the Kerala General Sales Tax Rules, 1963, provides as follows : " 9. Determination of taxable turnover.- In determining the taxable turnover, the amounts specified in the following clauses, shall subject to the conditions specified therein, be deducted from the total turnover of the dealer - (1) all amounts of sales tax collected by the dealer, if shown separately in the bills. " But for this deduction, the sales tax collected would also form part of the taxable turnover. WE have to bear in mind section 22 of the Kerala General Sales Tax Act, which permits a registered dealer to pass on the tax leviable on the sale of any goods to the customer. The basic concept of the levy being an indirect tax and the facility to pass on the tax is afforded by the statute, the only purpose served by rule 9 (1) of the Kerala General Sales Tax Rules is to exclude the sales tax collected from the taxable turnover. In this connection, the decision of the Supreme Court in Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax [1971] 28 STC 331 is relevant.

(3.) IN Radha Krishna Surajmal v. Commissioner of Commercial Taxes [1979] 43 STC 203 (Pat), a similar question arose for consideration. Section 7 (1) (b) and section 7 (2) (a) (ii) of the Bihar Sales Tax Act (Act 19 of 1959) provided for deduction of the amount of sales tax actually collected as such, if any, along with the sale prices received or receivable in respect of sales of goods. The court posed the question as to what is the meaning of the expression "collected as such". A further question was also posed thus : " Does it mean that in every sale memo, sales tax realised must be shown separately from the price realised as the value of the goods sold, or, does it mean that even though it is not so indicated in the sale memo, the identity of the sales tax realised on the sale value of the goods can still be ascertained ?" The court observed thus : " Is the amount shown in the sale memo only the value of the goods sold, or, whether the amount shown includes partly the value of the goods sold and partly sales tax realised on the sale of goods ? The idea underlying the use of the expression "collected as such" obviously seems to be that if there is evidence to indicate that part of the amount in a sale represented the sales tax, it must be said that the sales tax had been collected as such on the said transaction and it has to be allowed as a deduction in computing the taxable turnover. . . . . . . . . . . . . The legal position, therefore, seems to be clear that for claiming deduction in terms of section 7 (1) (b) and 7 (2) (a) (ii) of the Act, all that is necessary is that there must be evidence, not necessarily only the sale memos, to indicate that apart from the sale value of the goods sold, an amount had been collected by way of sales tax as such. If such evidence is available with the dealer, and it is found by the department to be a piece of acceptable evidence, the claim must be allowed. " We would only add that the case on hand is based on stronger foundation, in that even the sale bills indicate that the amount collected is "including sales tax".