Statutory tax collection by seller excluded from taxable turnover where purchaser bore liability under the liquor tax provision.

Amounts collected by sellers of foreign liquor under section 21-A of the Madras Prohibition Act, 1937, as sales tax payable by the purchaser, were not part of the sellers' taxable turnover under the Madras General Sales Tax Act, 1959. The statutory scheme made the purchaser liable for the tax, with the seller acting only as a collector and remitter to Government. Because such sums were collected under a statutory obligation and not as consideration for the sale of goods, they fell outside the definition of turnover. The authorities dealing with a dealer passing on his own tax burden were therefore inapplicable, and the High Court's view was correct.

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Issues: Whether amounts collected by sellers of foreign liquor under section 21-A of the Madras Prohibition Act, 1937, as sales tax payable by the purchaser, formed part of the sellers' total turnover liable to assessment under the Madras General Sales Tax Act, 1959.

Analysis: Section 21-A required the seller of foreign liquor to collect the tax from the purchaser and pay it over to the Government. The liability to pay that tax was on the purchaser, while the seller acted only as a statutory collector. The definition of turnover under the Madras General Sales Tax Act, 1959, covered the consideration for goods sold, but amounts collected under a statutory obligation as tax on the purchaser could not be treated as consideration received by the dealer. The authorities dealing with situations where a dealer passed on his own tax burden were therefore inapplicable.

Conclusion: The amounts collected under section 21-A did not form part of the sellers' taxable turnover under the Madras General Sales Tax Act, 1959, and the High Court's view was correct.

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