Statutory protection against retrospective sales tax depends on proving non-collection and separate accounting of tax as tax.

Protection under section 10(1) of the Central Sales Tax (Amendment) Act, 1969 depends on proof that Central sales tax was not collected from purchasers. The governing test requires the buyer to have agreed to pay tax in addition to the price and the dealer's accounts to show the tax separately. Even if bills suggest the receipts were inclusive of tax, the absence of separate reflection in the account books is decisive. On the record, separate accounting of any alleged tax collection was not shown, so the statutory condition of non-collection was satisfied and the demand for Central sales tax could not stand.

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Issues: Whether the petitioner was entitled to the protection of section 10(1) of the Central Sales Tax (Amendment) Act, 1969 on the ground that it had not collected Central sales tax from purchasers in respect of the inter-State turnover in cotton.

Analysis: The relief under section 10(1) depended on proof that tax had not been collected from the purchasers. The governing test, drawn from the earlier Division Bench decision, required that the buyer should have agreed to pay tax in addition to the price and that the dealer's accounts should show the tax separately. Even if the bills suggested that the amounts received were inclusive of sales tax, the absence of evidence that such amounts were separately shown in the dealer's account books was sufficient to attract the statutory protection. The record did not show separate accounting of the alleged tax collection.

Conclusion: The petitioner satisfied the statutory condition of non-collection of tax and was entitled to the benefit of section 10(1) of the Central Sales Tax (Amendment) Act, 1969; the demand for Central sales tax was unsustainable.

Ratio Decidendi: For the purpose of the statutory protection against retrospective levy, tax is treated as collected only when it is shown to have been recovered in the character of tax and separately reflected in the dealer's accounts.

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