Court declares sales tax on collected amount by dealer ultra vires; additional tax order vacated. Petitioner granted relief.

The court declared the levy of sales tax on the amount of sales tax collected by the dealer as ultra vires. The order imposing further sales tax was vacated, confirming that the sales tax collected by the petitioner is not subject to additional tax. The respondents were directed to pay the petitioner's costs, with the Counsel's fee set at Rs. 50. The petition was allowed, providing relief to the petitioner from the additional sales tax on the collected amount.

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Issues:
Levy of sales tax on the amount of sales tax collected by the dealer.

Analysis:
The petitioner, a registered dealer under the Travancore-Cochin General Sales Tax Act, collected sales tax from purchasers. The Agricultural Income-tax and Rural Sales Tax Officer levied further sales tax on the amount collected, which was upheld by the Assistant Commissioner and Deputy Commissioner. The petitioner challenged the levy as ultra vires, arguing that the sales tax collected should not be subject to additional tax. The definition of "turnover" under Section 2(k) includes the amount for which goods are sold, but Rule 7(1) specifies deductions from gross turnover to determine net turnover for sales tax assessment. The rule includes "All amounts of sales tax collected by the dealer" as a deduction, indicating that the sales tax collected should not be subject to further tax. The sales tax collected by the dealer is not a charge for any action related to the goods sold but an obligation imposed by the state on the seller. Therefore, the dealer should not be liable for additional sales tax on the collected amount.

The judgment declares the order imposing sales tax on the collected sales tax as ultra vires, vacates the order, and confirms that the sales tax collected by the petitioner is immune from further levy. The respondents are directed to pay the petitioner's costs, with the Counsel's fee set at Rs. 50 due to the relatively small amount involved in the dispute. The petition is allowed, granting relief to the petitioner from the additional sales tax on the collected amount.

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