RAMKRISHAN KULWANTRAI Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) These four references under section 61(1) of the Bombay Sales Tax Act, 1956 (hereinafter for the sake of brevity referred to as "the Act"), have been made at the insurance of the assessee and, in each of these references, the same identical question has been submitted to this Court for its determination. The parties to these references are the same and the material facts which have given rise to these references and which are necessary for answering the question submitted to us are also the same. The only difference is that Sales Tax Reference No. 179 of 1976 concerns the assessment year 1st April, 1963, to 31st March, 1964; Sales Tax Reference No. 178 of 1976 concerns the assessment year 1st April, 1964, to 31st March, 1965; Sales Tax Reference No. 177 of 1976 concerns the assessment year 1st April, 1965 to 31st March, 1966; and Sales Tax Reference No. 181 of 1976 concerns the assessment year 1st April, 1966, to 31st March, 1967. For this reason, we have thought it convenient to dispose of all these four references by a common judgment.

(2.) The assessee are a partnership firm. They are registered dealers under the Act and carry on business in iron and steel and in other goods. During each of the above assessment years, the assessees delivered a part of their stock of iron and steel to certain persons under the directions and orders issued to them by the Iron and Steel Controller. Apprehending that the sales tax authorities might contend that these transactions were transactions of sale of these goods to the persons to whom these goods were delivered as aforesaid, the assessee asked such persons to pay to them the amounts which they would be liable to pay by way of sales tax to the Government if the department were top hold that these transactions were transactions of sale and, therefore, exigible to tax under the Act. In the course of their assessment proceedings, however, the Sales Tax Officer accepted the contention of the assessee that these transactions were not transactions of sale and were, therefore, not exigible to tax. However, the Sales Tax Officer by his orders under section 37 of the Act forfeited the said amounts paid to the assessee by the persons to whom the goods were delivered by them pursuant to the directions and orders of the Iron and Steel Controller as being amounts by way of tax wrongfully collected by the assessees. The assessees thereupon filed appeals before the Assistant Commissioner of Sales Tax. These appeals were dismissed. The assessees thereupon went in second appeal to the Sales Tax Tribunal. The Tribunal also dismissed the assessees' appeals. It is against these orders of the Tribunal that the present references have been made. The question referred to us in each of these references is as follows :

(3.) Section 37(1), as it stood at the relevant time, inter alia, provided that if any person not being a dealer liable to pay tax under the Act collected any sum by way of tax, or being a registered dealer collected any amount by way of tax in excess of the tax payable by him, or otherwise collected tax in contravention of the provisions of section 46, he would not only be liable to pay a penalty, but also the sum collected by him by way of tax in contravention of section 46 was liable to be forfeited to the State Government. The other sub-section of section 37 prescribe the procedure for levy of such penalty and forfeiture of the amount of tax wrongfully collected.