LexJOINT COMMERCIAL OFFICER, DIVISION II, MADRAS-2 ETC. versus SPENCER & CO. ETC. ETC.
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. 1' ' ' , • ... JOINT COMMERCIAL OFFICER, DIVISION II, MADRAS-2 ETC. v. SPENCER & CO. ETC. ETC. May 2, 1975 (V. R. KRISHNA IYER, R. S. SARKARIA AND A. C. GUPTA, JJ.J Madras General Safes Tax Act, 1959, Sections 2(q), 2(r) and 3(1)---:- an Dealer in foreign liquor and other goods-Tax paid under s. 21-A of Madras Prohibitiaft Act, 1937 by purchaser if part oj taxable turnorer of the dealer . • 439 A B The respondents-assessees are dealers in foreign liquor, among other goods. They have been assessed to, sales tax as dealers on sales or purchases of other C goods under s. 3(1) of the Madras General.Sales Tax Act, 1959. They filed Writ Petitions in the High Court challenging certain orders (relating to. diffe· rent assessment years, ranging from 1959 to 1964-65) made by the assess- ing authority under the Madras General Sales Tax Act, 1959 proposing to re· determine the taxable turnover of the respondents by including the sale-price of foreign liquor which, it was alleged, had escaped · assessment. The High Court Cirected the sales tax authorities not to include in the. assessable turn- over the tax paid by the respondents under s. 21-A of the Madras Prohibition D Act, 193i. These appeals have been filed on the basis of the certificate of fit- ness granted by the High Court, · It was contended for the appellants that the amount coilected by the asses- sees by way of sales tax from· the purchasers were part of their total turnover and as much liab1e to be taxed under s. 3(1) of the Act. Rejecting the contention and dismissing the appeals, HELD: It is clear from s. 21-A of the Madras Prohibition Act. 1937 that the sales tax which the section requires the seller of Foreign liquof to collect from the purchaser is a tax on the purchaser and not on the seIJer. Jt is a tax on the price of the liquor and that tax is to be paid by the purchaser. Section 21-A makes the seller a collector of tax for the Gov- ernment, and the amount collected by him as tax under this section cannot therefore be a part of bis turnover. Under the Madras General Sales Tax Act, 1959 tb.e dealer has a statutory duty to collect the sales tax- payable by him from his customer, and when the dealer passes on to the customer the amount of tax which the former is liable to pay, the said amount does not cease to be the price for the goods altho"Qgh "the price is expressed as X -plus purchase tax". Bnt the amounts collected by the. assessees concerned in these appeals unde4' a statutory obligation cannot be a part of their taxable turnover under the Act. [442A-D] . M/s. George Oakes (P) Ltd., v. State of Madras, [1962] 2 S.C.R. 57Q, State of Kera/a v. Ramaswamy Iyer and Sons, [1966] Suppl. S.C.R. 582· and Delhi Cloth and General Mills Ltd. v. Commissioner of Sales Tax, Indore, [19711 Suppl. S.C.R. 945, held not applicable. Paprica Ltd. and Anr. v. Board of Trade, [1944] 1 All. E.R. 372, referred to. E F G CML APPELLATE JURISDICTION : Civil Appeals Nos. 2005 to 2016 H of 1970. From the Judgment and Order dated the 10th April, 1969 of the Madras High Court in W.Ps. Nos. 2787 to 2790 of 1966 and 2988 to 2991 of 1966 and T.C. Nos. 102, 104 & 195 of 1967. !OSC/75-29 440 SUPREME COURT REPORTS [1975] SUPP· S.C.R. A S. Govind Swaminathan, K. Venkataswami. N. S. Sivam, A. V. B Rangam and A. Subhashini, for the appellants. T. A. Ramachandran, for the respondents (In C.As. Nos. 2005- 2008 & 2013-2016/70). Vineet Kumar, for respondent No. 1 (Jn C.A. Nos. 2009-2012/ 70). The Judgment of the Court was delivered by GUPTA, J.-These twelve appeals arise out of a common judgment of •the Madras High Court disposing of the writ petitions filed by the respondents in which they challenged certain orders of the assessing C authority under the Madras General Sales Tax Act, 1959 proposing to redetermine the taxable turnover of the respondents by including the sale-price of foreign liquor which, it was alleged, had escaped as- sessment. The High Court directed the sales tax authorities not to include in the assessable turnover the tax paid by the respondents under sec. 21-A of the Madras Prohibition Act, 1937. In these appeals, D brought on certificate .of fitness, the correctness of the High Court's decision is questioned by the sales tax authorities. The appeals have three different assessees as respondents and relate to different assess- ment years conceniing each assessee, ranging from 1959-60 t
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