Forest development tax is not part of turnover for sales tax, though refund relief remains subject to recomputation and unjust enrichment.

Forest development tax collected under section 75A of the Kerala Forest Act is levied on the purchaser and credited to the forest development fund, so the forest department collects it only as an agent of the State. It does not form part of the dealer's sale consideration or turnover under the Kerala General Sales Tax Act, 1963, and sales tax cannot be charged on that element. Relief was therefore available against sales tax on the forest development tax component, but any refund or adjustment remained subject to recomputation of liability and the bar of unjust enrichment before the competent authorities.

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Issues: (i) whether forest development tax collected under section 75A of the Kerala Forest Act forms part of the turnover of the forest department for levy of sales tax under the Kerala General Sales Tax Act, 1963; (ii) whether the petitioners are entitled to relief against the sales tax collected on the element of forest development tax and to refund or adjustment of excess tax.

Issue (i): whether forest development tax collected under section 75A of the Kerala Forest Act forms part of the turnover of the forest department for levy of sales tax under the Kerala General Sales Tax Act, 1963.

Analysis: Section 75A levies forest development tax on the consideration for sale of forest produce and requires it to be collected along with that consideration. The levy is on the purchaser and is credited to the forest development fund under section 75B. The statutory scheme shows that the forest department collects the amount only as an agent of the State and not as part of its own sale consideration. The definition of turnover under the Kerala General Sales Tax Act, 1963 covers the aggregate amount for which goods are bought or sold, but the amount collected as forest development tax does not become part of the dealer's sale price or consideration. The levy differs from cases where a tax or fee is statutorily authorised to be recovered from the purchaser as part of the seller's turnover.

Conclusion: forest development tax does not form part of the turnover of the forest department for levy of sales tax, and sales tax cannot be collected on that element.

Issue (ii): whether the petitioners are entitled to relief against the sales tax collected on the element of forest development tax and to refund or adjustment of excess tax.

Analysis: The demand of sales tax on the forest development tax element was held unsustainable, so relief against such demand was granted. At the same time, any refund claim requires recomputation of the forest development tax liability and would attract the doctrine of unjust enrichment, since the burden may already have been passed on in the course of trade. The question of refund or adjustment was therefore not treated as automatically payable and was left to be pursued before the competent authorities.

Conclusion: the petitioners are entitled to relief against sales tax on the forest development tax component, but refund or adjustment is subject to recomputation and the bar of unjust enrichment.

Final Conclusion: the writ petitions succeeded to the extent that sales tax on the forest development tax element was held impermissible, while refund-related relief remained subject to statutory recomputation and examination by the authorities.

Ratio Decidendi: where a tax is statutorily levied on the purchaser and collected by the seller merely as an agent of the State, the amount so collected does not constitute the seller's turnover for sales tax purposes unless the statute clearly makes it part of the sale consideration or authorises recovery as part of the dealer's taxable price.

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