LexM/S. GEORGE OAKES (P.) LTD. versus STATE OF MADRAS
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570 SUPREME COURT REPORTS [1962] r961 hearing cases would refer the matter for the decision of a Full Court,. In the result these appeals are Jaisri Sahu 11 tl d 1 1 d b tl t . 1 t v a owe an tic c ccrecs passe y ie ria cour rcs- Rajdewa;, Dubey tored with costs throughout. One set of hearing costs. Ve11kataraina Aiyar ]. 1961 April z8. Appeals allowed. M/S. GEOl~GE OAKES (P.) LTD. v. STATE OF MADRAS (S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH, J.C. SHAH and T. L. VENKATARAMA ArYAR, JJ.) Sales Tax-Turnover-If includes tax collected by seller- Decnzing statute-Constitutionality-Constitution of India, Entry 54, List II Seventh Schedule-Government of India Act, z935 (26 Geo. 5 GI Ed. 8 Ch. 2), Entry 48, List II, Sch. VII-Madras General Sales Tax Act, (Mad. Act IX of r939), ss. 2(i), 2(h), 8B- M adras General Sales (Definition of Turnover and Validation of Assessments) Act, r954 (Mad. XV II of r954), ss. 2, 3-Turnover and Assessment Ruks, rr. 4, 5, 6. II. Certain amounts collected by the appellants as salrs tax were included in their turnover by the sales tax authorities. They contested the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assess- ments) Act, 1954. on the ground inter alia that the Sate Legis- lature went beyond its legislative competence under entry 54 of List II of the Constitution in enacting by the impugned Act that the amounts collected by the dealer by way of tax shall he deemed to have formed part of his turnover. Held, that entry 54 of List II of the Seventh Schedule of the Constitution is similar to entry 48 of List II of Sch. VII of the Government of India Act, 1935 sales under which have been held to be transactions passing ti tie to the Goods from the seller to the buyer and that a mere executory agreement was not a sale within the meaning of that entry. The same mean- ing must be given to entry 54. 2 s.c.R. SUPREME COUR'r REPORTS 571 State of Madras v. Gannon Dullkerly & Co., Ltd., [r959] S.C.R. 379 and Sales Tax Officer v. M/s. Budh Prakash ]ai Prakash, [r955] r S.C.R. 243, referred to. Under ss. 2(i) and 2(h) of the Madras General Sales Tax Act, 1939, the expression "turnover" means the aggregate amount for which goods are sold either for cash or deferred payment or other valuable consideration, and when a sale attracts purchase tax which is passed on to the consumer what the buyer has to pay includes the tax and the aggregate amount to be paid would fall under the definition of turnover. \\'hen the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entitle con- siderations. Papreka Ltd. v. Board of Trade, [r944] I All E.R. 372, Love v. Norman Wright (Builders) Ltd., [r944] l All E. R. 618, followed. Asoka Mar/1eting Co. Ltd. v. The State of Bihar, [r959] 10 S.T.C. 110 and Tata Iron and Steel Co. v. The State of Bihar, [r958] S.C.R. 1355. referred to. Although s. BB of the Madras General Sales Tax Act, r939 and the Turnover and Assessment Rules separately mentioned the amounts collected as tax for the purpose of paying such amounts to the Government, no immutable distinction was drawn between the sale price and the tax nor was any such distinction maintained under s. 2 of the impugned Act. Assum- ing that such a distinction did exist the Legislature was com- petent to enact under entry 54 in List II of the Constitution that the tax shall be deemed to have formed part of the turn· over and obliterate the distinction for the limited period during which the impugned Act operated. The impugned Act was therefore valid. The Deputy Commissioner of Commercial Taxes v. M. Krishna. swami Mudaliar, [r954] 5 S.T.C. 88, held not applicable. Sri Sundararajan & Co. v. The State of Madras, [r956] 7 S.T.C. 105, approved. The Government of Andhra v. East India Commercial Co., Ltd., [1957] 8 S.T.C. n4 and Bengal Immunity Co., Ltd. v. State of Bihar, [r955] 2 S.C.R. 603, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 280 and 281 of 1960. Appeal from the judgment and order dated April 20, 1956, of the Madras High Court, in T. R. C. Nos. 101 and 102 of 1956. R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. M. M. Ismail and T. M. Sen, for the respondent. I96I George Oakes (P.) Ltd, v. State of Madras George Oakes (P.) Ltd. v. State of lt!adras 572 SUPREME COURT REPORTS [1962]
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