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Issues: Whether tax collected by a dealer from sales at an unregistered branch, but subsequently paid over to the Government as tax assessed on the same transactions, could be forfeited under section 37 of the Bombay Sales Tax Act, 1959.
Analysis: The power of forfeiture under section 37 is discretionary and operates only in respect of sums collected by a person and retained by him in contravention of section 46. The expression "shall be forfeited" is to be read as "shall be liable to be forfeited". Forfeiture cannot extend beyond the amount actually collected and kept by the dealer, and where the whole amount collected has already been paid to the Government as tax on the same transactions, nothing remains available for forfeiture. The Court also held that registration under section 22 is of the dealer and not merely of a place of business, so non-filing of separate applications under rule 7(3) is only a directory breach and does not render an already registered dealer an unregistered dealer for the purposes of sections 37 and 46.
Conclusion: The forfeiture of tax collected by the assessee was not sustainable and the question was answered in the negative, in favour of the assessee.
Ratio Decidendi: Forfeiture under section 37 applies only to tax unlawfully collected and retained in contravention of section 46, and a registered dealer cannot be treated as unregistered merely because separate registration for a branch was not obtained where the dealer had already paid over the collected amount as tax on the same transactions.
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