COMMISSIONER OF SALES TAX U.P. LUCKNOW versus MOOL CHAND SHYAM LAL, BELANGANJ, AGRA

Citation: [1988] SUPP. 1 S.C.R. 750 · Decided: 01-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Judgment (excerpt)

A 
COMMISSIONER OF SALES TAX U.P. LUCKNOW 
v. 
MOQL CHAND SHYAM LAL, BELANGANJ, AGRA 
AUGUST 1, 1988 
8 
[SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.) 
U.P. Sales Tax Act,. 1948/U.P. Sales Tax Rules, 1948: Sections 
8A(2)(b), 18(3) and 15A(l)(qq)/Rule 41(7) and Notification No. ST 
4602/29 dated June iB, 1975. Assessee-Dealer in wheat products-
Realised wheat sales tax, wheat purchase tax and octroi in addition (o 
C sale price fixed by Government-Whether penalty can be levied for 
realisation of excess amount. 
The respondent-dealer who runs Roller Flour Mills was supplied 
wheat by the Food Corporation of India and. Regional Food Controller 
for the manufacture of Atta, Maida, Suji etc. The sale price of the 
D wheat products was lixed by the State Government under the U .P. 
Roller Flour Mills (Ex-Mill Price) Control Order, 1975. The notilica-
tion issued under the Control Order also authorised the mills to realise 
iu addition to the lixed ex-mill price, the proportionate amount of 
octroi, terminal tax, purchase tax or sales tax, etc. payable by the mills 
on the wheat crushed. Accordingly, the respondent realised this 
E amount. The respondent further realised the proportionate amount of 
the wheat purchase tax and wheat sales tax and octroi, as consideration 
of the sale price in addition to the sale price lixed by the State Govern-
ment. For this excess realisation, the Assistant Commissioner (Assess-
ment) imposed a penalty under section 15-A(l)(qq) of the U.P. Sales 
Tax Act, 1948 treating it as realisation of tax in excess of tax payable. 
F 
The respondent's appeals before the Deputy Commissioner (Appeals) 
and the Tribunal failed. The High Court, however, allowed the revis-
ion. 
Dismissing the appeal, it was, 
G 
HELD: (1) Penalty under the Sales Tax Act is leviable for excess 
realisation of tax. Therefore, realisation of the amount should be as tax 
and not in any other manner. I 7 53G J 
(2) The excess amount charged was in contravention of the pro-
t. 
visions of the Control Order. But that alone was not suflicient for initia-
H lion or levy of penalty under sub-clause (qq) of section 15-A (1) of the 
750 
' 
COMMR. OF SALES TAX"· MOOL CHAND [MUKHARJI, J.] 
751 
Act. The excess amount has to be realised as sales or purchase tax and 
the tax so charged must have been in excess of tax payable. [754A-B] 
(3) Realisation of excess amount is not impermissible hut what is 
not permissible is realisation of excess amount as tax. [754EI 
A 
(4) The imposition of a penalty under the Act is qu•si criminal 
B 
and unless strictly proved the assessee is not liable for the same. If the 
purchaser realises more money, that by itself will not attract the penal 
provisions. [754F-G] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2551 
(NT) of 1988. 
From-the Judgment and Order dated 7.7.1982 of the Allahabad 
c 
.,, 
High Court in S.T.R. No. 33 of 1982. 
A.K: Srivas!ava for the Appellant. 
D 
R.R. Agarwal and C.P. Pandey for the Respondent. 
The Judgment of the Court was delivered by 
SABYASACHl MlJKHAR.ll. J. Special leave granted. The 
appeal is disposed of by the Judgment herein. 
E 
The appeal relates to the assessment year 1976-77, period being 
1.4. 76 to 3.1. 77 under the U .P. Sales Tax Act, l'J48 (hereinafter called 
the Act). The dealer runs a Roller Flour Mills unclcr the name and 
style of M/s. Moo! Chand Shyam Lal Roller Flour Mills, Agra in which 
Atta, Maida, Suji, Bran and Refraction are manufactured. For the 
F 
manufacture of Atta, Maida and Suji the wheat is supplied by the Food 
Corporation of India and Regional Food Controller under the lJ .P. 
Roller FlourMills (Regulation of use of Wheat) Order. The sale price 
of the said wheat products i.e. Atta, Maida, Suji has been fixed by the 
State Government from time to time· under U.P. Roller Flour Mills 
(Ex-Mill Price Control) Order, 1975 under the notificatio11s issued by G 
the Government. The State Government has further issued the notifi-
cation No. ST. 4602/29-Wheat-127/175 dated 28th June, 1975 under 
the U .P. Roller Flour Mills (Ex-Mill Price) Control Order, 1975 fixing 
i 
the ex-mill price of the sales of wheat products and also authorised the 
mills in the said notification to realise the proportionate amount of 
octroi, terminal tax, purchase tax or s<.1les tax, duty or l:xcisc duty H 
' r 
752 
SUPREME COURT REPORTS 
[1988] Supp. 1 S.C.R. 
payable by the mills on the wheat crushed in addition to the fixed 
A ex-mill price. The dealers

Excerpt shown. Read the full judgment & AI analysis in Lexace.