Sales tax deduction from turnover cannot be denied merely because sale memos omit separate tax disclosure where accounts identify the tax collected.

A registered dealer's collection of sales tax from purchasers was deductible from gross turnover where the statute expressly permitted deduction of tax realised by the dealer. The deduction could not be denied merely because the sale memos did not separately state price and tax, since the statutory right under the Orissa Sales Tax Act did not depend on strict compliance with the memo format. Where the tax component was separately maintained in the books and remained identifiable, its exclusion from taxable turnover was justified and the dealer was entitled to the deduction.

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Issues: Whether the amount realised by the dealer from purchasers by way of sales tax, though not shown separately in the sale memos, was deductible from gross turnover and could be excluded from taxable turnover.

Analysis: The scheme of the Orissa Sales Tax Act, 1947 permitted a registered dealer to pass on the burden of sales tax to the purchaser and to deduct the amount so realised from gross turnover. Section 5(2)(A)(b) allowed deduction of any amount by way of tax realised by the dealer, and this statutory right was not made contingent upon strict compliance with the form of the sale memo under section 9-B(2). Although section 9-B(2) required separate disclosure of price and tax in cash or credit memos, the record showed that the tax component had been separately maintained in the books of account and could be identified. The absence of separate disclosure in the sale memos, by itself, did not convert the tax collected into part of sale price or defeat the deduction where the dealer was otherwise authorised to collect the tax.

Conclusion: The amount realised as sales tax was deductible from the gross turnover, and the addition of that amount to taxable turnover was not justified; the answer was in favour of the dealer and against the Revenue.

Ratio Decidendi: Where a statute authorises a registered dealer to collect sales tax from purchasers and expressly permits deduction of tax realised by the dealer, the deduction cannot be denied merely because the sale memo does not separately show the price and tax, provided the tax collected is otherwise identifiable and supported by the accounts.

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