RADHA KRISHNA SURAJMAL Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) At the instance of the dealer, the Commercial Taxes Tribunal has referred the undermentioned question under Section 33(1) of the Bihar Sales Tax Act, 1959 (Bihar Act 19 of 1959) (hereinafter referred to as "the Act"), for opinion of this Court: Whether, in the facts and circumstances of the case, the Tribunal is justified in holding that a deduction of Rs. 1,32,710 claimed by the dealer towards sales tax realised from his customers but not shown separately in the sale memos was not admissible in terms of Sub-sections (1)(b) and (2)(a)(ii) of Section 7 of the Bihar Sales Tax Act, 1959 ?

(2.) The relevant facts are that for the period of assessment 1965-66, the dealer claimed to deduct a sum of Rs. 1,32,710 from the gross turnover in terms of Section 7(1)(b) and 7(2)(a)(ii) of the Act. In support of its claim, the dealer has stated that all the sale memos issued by it indicated that the value realised under the sale memo was inclusive of sales tax. Each sale memo bore a rubber-stamp marking "including tax". The assessing officer, however, did not accept the claim for deduction holding that there was no evidence to the effect that the sales taxes had been collected as such on each sale made. The dealer then carried the matter in appeal before the Deputy Commissioner, Commercial Taxes. The sale memos were produced before him and it was also stated in argument before him that ledger for every goods account had been separately maintained and taxes realised had been shown separately in each such account. Such being the position, it was argued that the deduction claimed by the dealer was admissible. The Deputy Commissioner of Commercial Taxes accepted the dealer's contention and observed that "to my mind it appears that sales tax was actually collected along with the sale prices in each cash memo and it did not lose its identity and, hence, it is directed that the deduction should be allowed from the gross turnover".

(3.) The Commissioner of Commercial Taxes then carried the matter in revision before the Commercial Taxes Tribunal on the ground that it did not appear from the sale bills that the sum of Rs. 1,32,710.38 had been charged in the said bills towards sales tax "as such" and, therefore, it could not be deducted in computing the taxable turnover of the dealer. Before the Tribunal, the dealer referred to the findings of the Deputy Commissioner of Commercial Taxes based as they were upon the facts as mentioned before him and urged that on those facts the conclusion arrived at by the Deputy Commissioner of Commercial Taxes must be upheld. The Tribunal observed that although the arguments made on behalf of the dealer "are indeed very persuasive", but on a plain reading of the provisions contained in Section 7(1)(b) and 7(2)(a)(ii) of the Act unless the amount received as sales tax had been shown as such in the sale memos issued, the claim for deduction was not permissible. Dealing with the expression "sales tax collected as such" as occurring in the said two provisions of the Act, the Tribunal observed that the literal interpretation was that "the payment of the tax should be received so characterised. In other words, even at the time of receipt of the payment, the tax amount should be received separately or clearly known". With these observations, the Tribunal thought that the order passed by the Deputy Commissioner allowing the dealer's claim of deduction of the said sum of Rs. 1,32,710 out of the gross turnover was illegal. The disallowance of the claim as made by the assessing officer was restored. These are the relevant facts concerning the question.