Sales tax collections by a registered dealer stay outside turnover when law requires remittance to the Government.

Amounts collected by a registered dealer as sales tax under the statutory collection provision retained their character as tax and did not form part of the bargain of sale or gross turnover. The statutory scheme allowed collection only of the tax leviable under the Act and required remission to the Government, while the charging and assessment provisions treated such collections separately from sale price. On that footing, money collected and paid over as tax could not be taxed again as part of turnover. The Madras HC therefore upheld the view that the collections remained outside taxable turnover and the challenge to the Tribunal's approach failed.

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Issues: Whether amounts collected by a registered dealer from purchasers by way of sales tax and paid over to the Government form part of the dealer's turnover as sale price and can be taxed again.

Analysis: The statutory scheme permitted a registered dealer to collect only the tax leviable under the Act and required the collected amount to be paid over to the Government. The provisions governing penalties and recovery showed that such collections retained the character of tax and were not part of the bargain of sale. The charging provision taxed the dealer on turnover determined under the rules, while the return form and assessment scheme separately treated amounts collected by way of tax under the special provision. On that scheme, money collected as tax under statutory authority could not be treated as part of the purchase price or gross turnover.

Conclusion: The amounts collected by the registered dealer by way of tax under the Act did not form part of turnover and were not liable to be taxed again; the issue was decided in favour of the assessee.

Final Conclusion: The petitions challenging the Tribunal's view failed, and the tax collected under the statutory collection provision remained outside the taxable turnover.

Ratio Decidendi: Where a dealer is expressly authorised by law to collect sales tax and is obliged to remit it to the State, the collection retains its character as tax and does not become part of sale price or turnover.

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