Forfeiture of excess tax collections: non-sale transaction receipts counted toward annual liability under sales tax law.

Section 21(4) of the Bombay Sales Tax Act, 1953 was construed broadly to permit forfeiture where a registered dealer collected any amount by way of tax in excess of the tax payable for the year. The tax payable was the annual liability assessed on turnover of sales, not the tax on each transaction. On that basis, collections made on transactions that were not sales could be included in the aggregate to determine whether the dealer had collected more than was lawfully payable. The provision was applied to prevent retention of amounts collected without a corresponding tax liability, and the forfeiture was held valid.

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Issues: Whether section 21(4) of the Bombay Sales Tax Act, 1953 permitted forfeiture of amounts collected by a registered dealer by way of tax on transactions that were not sales, where the aggregate collection exceeded the tax payable for the year.

Analysis: Sections 21(1) and 21(2) prohibited collection of tax in specified sale-related situations, but section 21(4) used broader language and provided for forfeiture where any registered dealer collected any amount by way of tax in excess of the amount payable by him. The amount payable under the Act was the tax assessed on the dealer's annual turnover of sales, not the tax on each individual transaction. On that construction, collections by way of tax on non-sale transactions could be taken into account in determining whether the annual aggregate collection exceeded the amount actually payable. The provision was intended to prevent abuse of the taxing scheme and to deny retention of amounts collected without corresponding liability to pay tax to the State.

Conclusion: Section 21(4) applied to the excess collected by the petitioners, including amounts collected on transactions which were not sales, and the forfeiture was valid.

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