Additional tax collected as tax was included in turnover and deductible under the Bihar Sales Tax Act

Additional tax collected from purchasers was treated as part of gross turnover under section 2(k) because the Act characterised the levy as tax, authorised recovery from purchasers, and read collections as turnover realised in business. Additional tax collected separately as tax was also deductible from taxable turnover under section 7 because the deduction provision extended to tax actually collected as such, not only to general or special sales tax. The assessment orders were set aside to the extent they rejected deduction of additional tax, and the matter was remitted for redetermination under this interpretation.

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Issues: (i) Whether additional tax collected from purchasers formed part of the dealer's gross turnover under section 2(k) of the Bihar Sales Tax Act; (ii) Whether additional tax collected as tax was deductible from taxable turnover under section 7 of the Bihar Sales Tax Act.

Issue (i): Whether additional tax collected from purchasers formed part of the dealer's gross turnover under section 2(k) of the Bihar Sales Tax Act.

Analysis: The scheme of the Act treated additional tax as tax within the meaning of section 2(s), and section 3B authorised levy of additional tax on gross turnover. Section 20A(2) recognised that a dealer could recover from purchasers amounts payable as tax under the Act. Reading the charging and computation provisions together, the collection of additional tax by the dealer was treated as part of the turnover realised in the course of business.

Conclusion: Additional tax realised from purchasers was held to fall within gross turnover under section 2(k) of the Bihar Sales Tax Act.

Issue (ii): Whether additional tax collected as tax was deductible from taxable turnover under section 7 of the Bihar Sales Tax Act.

Analysis: Section 7 allowed deduction of sales tax actually collected as such from gross turnover for computing taxable turnover. Since additional tax was itself a tax under the Act and was collected separately as tax, it answered the description of tax actually collected as such. The deduction provision was therefore not confined to general sales tax and special sales tax alone, but extended to additional tax when collected in that character.

Conclusion: Additional tax collected as tax was held deductible in computing taxable turnover under section 7 of the Bihar Sales Tax Act.

Final Conclusion: The assessment orders were set aside to the extent they disallowed deduction of additional sales tax from gross turnover, and the matter was sent back for redetermination in accordance with the declared interpretation of the Act.

Ratio Decidendi: Where a taxing statute permits deduction of tax actually collected as such, an additional levy authorised under the same Act and separately collected as tax is deductible in computing taxable turnover, and may also be included in gross turnover if the statutory scheme treats sums recovered as tax as part of turnover.

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