Sales tax collection character is determined by how it is charged, not by later explanations or turnover status.

Amounts collected from purchasers under the description of sales tax are treated as collection by way of tax under section 46(2) of the Bombay Sales Tax Act, 1959, if the bills and manner of collection show a tax charge, even where the dealer says the amount represented tax earlier paid to a seller. The character of the collection depends on how it was collected, not on the dealer's explanation or on whether the underlying resale turnover was itself taxable. On that basis, the collection was held to fall within the statutory prohibition, and the Tribunal was found unjustified in treating it as something other than tax.

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Issues: Whether the amount collected under the head "sales tax paid to the manufacturer" from purchasers was collected by way of tax within the meaning of section 46(2) of the Bombay Sales Tax Act, 1959, and whether the Tribunal was justified in holding that such collection was not so made.

Analysis: The prohibition in section 46(2) applies where a registered dealer collects any amount by way of tax in excess of the amount of tax payable under the Act. The nature of the collection is determined by the character in which it is collected, and not by the dealer's explanation that it represented tax earlier paid to a seller. The bills expressly described the amount as sales tax, and the Tribunal erred in treating the collection as something other than tax merely because the assessee's resales were not themselves taxable. The fact that the turnover may ultimately be deductible or not taxable does not alter the character of the collection already made from purchasers. The question of forfeiture of the whole amount as against only the excess was left to be examined separately in the light of the governing principles.

Conclusion: The collection of Rs. 6,361.31 was by way of tax, and the Tribunal was not justified in holding otherwise; the answer was therefore against the assessee and in favour of the Revenue.

Ratio Decidendi: A sum collected from purchasers under the description of sales tax remains a collection by way of tax for section 46(2) if it is so collected, even where the dealer says it represents tax paid to a vendor or the underlying turnover is otherwise not taxable.

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