COMMERCIAL TAXES OFFICER Vs. TRILOK CHAND PREM PRAKASH

JUDGEMENT

(1.) THIS is a revision against the order of a Division Bench of the Board of Revenue dated 6th February, 1976. The only point involved for decision is, whether the market area cess collected by the assessee from the purchaser of the goods sold within the market area for being paid to the market area committee can be included in the sale price of the goods for computing the taxable turnover of the assessee. The Board of Revenue has accepted the assessee's contention that the cess collected by the assessee on behalf of the market area committee from the purchaser of the goods does not form part of the sale price. Hence this revision by the department.

(2.) ON behalf of the department reliance was placed on the Supreme Court decision in [1980] 46 STC 477 (Anand Swarup Mahesh Kumar v. Commissioner of Sales Tax) to contend that the cess collected by the assessee from the purchaser must form part of the sale price since the liability for payment of the cess is on the assessee who is the seller of the goods within the market area. This contention is untenable. The aforesaid decision of the Supreme Court itself negatives the contention. After referring to the earlier decisions on the point, the test applicable in such cases was indicated as under : " 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 tax on sales or purchases but where there is no statutory provision authorising the dealer to pass on the tax to the purchaser, such tax does form part of the consideration when he includes it in the price and realises the same from the purchaser. The essential factor which distinguishes the former class of cases from the latter class is the existence of a statutory provision authorising a dealer to recover the tax payable on the transaction of sale from the purchaser. "