Tax collected but not deposited may be identified in assessment, yet cannot be recovered through a demand notice absent express statutory authority.

In assessment proceedings under the Orissa Sales Tax Act, the assessing authority could examine the dealer's records to ascertain tax collected from customers and not deposited into the Government Treasury, and treat that sum as payable for deposit under the special deposit provision. That ascertainment was not an assessment of tax on that amount, but only identification of money required to be deposited. However, the amount so identified could not be recovered through a demand notice under the general recovery provision, because that mechanism applied to assessed or otherwise determined tax in the manner contemplated by the Act. The Revenue could identify the unpaid deposit, but not enforce recovery through section 13(4).

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Issues: (i) Whether, in proceedings under section 12 of the Orissa Sales Tax Act, the assessing authority could ascertain amounts collected by a dealer by way of tax and liable to deposit under section 9-B(3) of the Act; and (ii) whether such amount could be directed to be recovered through a demand notice under section 13(4) of the Act.

Issue (i): Whether, in proceedings under section 12 of the Orissa Sales Tax Act, the assessing authority could ascertain amounts collected by a dealer by way of tax and liable to deposit under section 9-B(3) of the Act.

Analysis: The assessment authority, while examining the dealer's records and accounts in the course of assessment, could determine whether tax had been collected from customers and not deposited into the Government Treasury. Such ascertainment was not the same as assessing tax on that amount, but only identifying the sum required to be deposited under section 9-B(3).

Conclusion: Yes. The assessing authority could lawfully ascertain the amount payable for deposit under section 9-B(3) in the assessment proceedings.

Issue (ii): Whether such amount could be directed to be recovered through a demand notice under section 13(4) of the Act.

Analysis: The amount contemplated by section 9-B(3) was not an assessed tax under section 12, and the statutory demand notice mechanism under section 13(4) was framed for tax assessed or otherwise determined in the manner there specified. Since the amount under section 9-B(3) was merely a sum collected by the dealer and required to be deposited, it did not fall within the scope of recovery by a demand notice under section 13(4).

Conclusion: No. The amount under section 9-B(3) could not be directed to be recovered through a demand notice under section 13(4).

Final Conclusion: The reference was answered by holding that the Revenue could identify the sum collected and not deposited, but could not recover it through a section 13(4) demand notice.

Ratio Decidendi: Amounts collected by a dealer as tax and required to be deposited under a special deposit provision may be ascertained in assessment proceedings, but they cannot be recovered through a demand notice meant for assessed tax unless the statute expressly so provides.

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