Actual tax collection is essential for forfeiture; credit notes and discounts alone do not justify it.

Forfeiture under section 18-AA of the Karnataka Sales Tax Act applies only where an amount is actually collected by way of tax or as tax in contravention of section 18. Amounts merely billed, tentatively shown, or adjusted through credit notes and discounts before tax is finally received do not amount to tax collected for forfeiture purposes. Where the disputed amount never reached the dealer as collected tax, forfeiture cannot be sustained. The assessing authority had not properly examined whether actual collection occurred, so the matter required reconsideration on that factual issue.

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Issues: Whether the amount covered by credit notes and discounts could be treated as tax collected by the dealer so as to justify forfeiture under section 18-AA of the Karnataka Sales Tax Act, 1957.

Analysis: Section 18-AA authorises forfeiture only where an amount is collected by way of tax or purporting to be by way of tax in contravention of section 18. The expression "collected" is confined to amounts actually collected and retained as tax, and does not extend to sums merely billed, tentatively shown, or adjusted before the tax is finally received. If credit notes are issued before payment, or if the amount never reaches the dealer as tax collected from the buyer, forfeiture cannot follow. The factual question whether the disputed amount was in fact collected was not properly examined by the assessing authority.

Conclusion: The forfeiture order could not be sustained on the material as it stood, and the matter had to be reconsidered by the assessing authority on the question whether there was actual collection of tax.

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