Excess tax collection must be tested transaction by transaction; annual netting cannot defeat statutory forfeiture.

Section 46(2) of the Bombay Sales Tax Act bars a registered dealer from collecting tax in excess of the tax payable under the Act, and the correct test is transaction-wise compliance rather than comparing total annual collections with total tax liability. Aggregating all tax collected during the year and netting it against the final liability would distort the statutory purpose, which is to prevent collection on non-exigible transactions and to forfeit excess amounts so collected. On that construction, the Tribunal was wrong to set aside the forfeiture order, and the issue was answered against the assessee.

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Issues: Whether, on the facts and circumstances of the case, the amount collected by the registered dealer by way of tax could be adjusted against the total tax payable so as to limit forfeiture under section 46(2) of the Bombay Sales Tax Act, 1959.

Analysis: Section 46(2) prohibits a registered dealer from collecting any amount by way of tax in excess of the tax payable under the Act. The controlling test is transaction-wise compliance with the statutory prohibition against excess collection, not a comparison between the aggregate tax collected during the year and the aggregate tax liability ultimately found payable. The earlier decisions relied upon by the Court make it clear that taking the total collections and deducting the tax payable would distort the language and purpose of the provision, which is to prevent collection of tax on transactions not exigible to tax and to forfeit the excess so collected.

Conclusion: The Tribunal was not correct in setting aside the forfeiture order. The question was answered in the negative and against the assessee, in favour of the department.

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