Separately collected sales tax may be excluded from taxable turnover when bills and price lists show net price and tax break-up.

Sales tax collected from purchasers was treated as separately recoverable and excluded from taxable turnover where the sale bills were read with the printed price list forming the basis of the bargain. The price list showed the net price and sales tax separately, and the billed aggregate reflected that break-up even though the invoice did not separately itemise tax. On those facts, the collection was in substance distinct from the sale price, and the assessee was held to have substantially complied with the Board of Revenue's direction that sales tax collected as such should not be included in total turnover. The amount representing sales tax was therefore excluded from taxable turnover.

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Issues: Whether the sum collected from purchasers as sales tax formed part of the assessee's taxable turnover under the Tamil Nadu General Sales Tax Act, and whether the assessee was entitled to exclusion of that amount from turnover.

Analysis: The bills were required to be read with the printed price list supplied to purchasers, which formed the basis of the bargain. The price list itself showed the net price and the sales tax payable separately, and the billed aggregate reflected that break-up even though the invoice did not separately itemise the tax. On those facts, the assessee intended to pass on the sales tax to the purchaser and the collection was in substance separate from the sale price. The Board of Revenue's instruction that sales tax collected as such should not be included in total turnover supported exclusion, and the assessee was held to have substantially complied with that direction.

Conclusion: The amount representing sales tax was not to be included in the assessee's taxable turnover, and the assessee succeeded.

Ratio Decidendi: Where sale bills are read with an operative price list showing the net price and sales tax separately, the sales tax component is treated as separately collected and is eligible for exclusion from taxable turnover under the governing executive direction.

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