Exemption breach liability can be quantified from statutory records, making the recovery provision workable and enforceable.

Liability under section 41(2) of the Bombay Sales Tax Act, arising from breach of a declaration in Form T linked to an exemption notification, is not a levy on taxable turnover but recovery of the tax loss caused by the breach. The applicable rate and amount can be ascertained from the nature of the goods, the relevant schedule, the dealer's documents, and surrounding statutory records; if accounts are incomplete, the Commissioner may determine the amount on the best available material under section 41(3). The Court held that the provision remains workable and enforceable because the tax due on the exempted transaction can be quantified with precision. The answer to the reframed issue was against the purchaser and in favour of the Revenue.

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Issues: Whether the liability of a purchaser who contravenes the terms of a declaration in form T to entry 39 of the exemption notification issued under section 41(1) of the Bombay Sales Tax Act, 1959, read with section 41(2), can be quantified with precision.

Analysis: Section 41(1) authorises exemption from tax by notification, while section 41(2) fastens liability on the person responsible for breach to pay the tax that would have been payable but for the exemption. The liability under section 41(2) is not a levy on the dealer's taxable turnover; it is a recovery of the tax loss caused by the breach, by reference to the transaction and the rate applicable to the exempted sale or purchase. The Court held that the rate and amount are ascertainable by reference to the nature of the goods, the relevant schedule, the documents issued by the selling dealer, and the surrounding statutory records. The fact that some instances may require investigation or computation does not make the provision unworkable, and the Commissioner may assess the amount due under section 41(3), including by adopting the best available materials where accounts are not forthcoming.

Conclusion: The liability under section 41(2) is capable of being quantified and the provision is enforceable. The answer to the reframed question is in the negative, in favour of the Revenue.

Ratio Decidendi: A provision that makes the person responsible for breaching an exemption condition liable to pay the tax that would have been payable on the exempted transaction is not invalid for want of an expressly stated rate, if the applicable tax can be ascertained by reference to the exempted transaction and the statutory scheme.

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