Forfeiture of excess sales tax collected and remitted was upheld where refund came only after remittance.

Excess tax collected by an assessee and remitted to the Government can be forfeited under section 46A of the Kerala General Sales Tax Act, 1963 when it was collected in contravention of section 22(2) and (3). The proviso protects only cases where the excess amount is returned to the same person from whom it was collected before remittance; later adjustment by credit notes after remittance does not satisfy that condition. Where the assessee remitted the excess with monthly returns and did not claim refund at assessment, the assessing authority may treat the amount as liable to forfeiture. The Tribunal was therefore justified in sustaining the demand, while affected buyers may seek reimbursement under rule 31D.

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Issues: Whether excess tax collected by the assessee and remitted to the Government could be forfeited under section 46A of the Kerala General Sales Tax Act, 1963, and whether the Tribunal was justified in sustaining the demand raised on that basis.

Analysis: Section 46A(1) authorises forfeiture of tax collected in excess in contravention of section 22(2) and (3), while the proviso saves only cases where the excess collected amount has been returned to the very person from whom it was collected before remittance to the Government. The scheme of the provision shows that later refund by credit notes after remittance does not attract the proviso. Once the assessee has remitted the excess collection with monthly returns and has not claimed refund at the stage of assessment, the assessing authority can treat the amount as liable to forfeiture, and the aggrieved buyers may seek reimbursement under rule 31D.

Conclusion: The demand of the excess tax collected and remitted was valid and the Tribunal was justified in sustaining it.

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