Forfeiture of excess tax collections cannot cover amounts already refunded to the customer under sales tax law.

Forfeiture under section 18-AA of the Karnataka Sales Tax Act applies only to tax collected in excess and actually retained by the dealer to prevent unjust enrichment. Where the assessee had already refunded part of the excess collection to the customer, that refunded amount could not be forfeited, because the provision does not extend to sums no longer retained by the dealer. A construction requiring the customer to pursue a separate claim against the Department would defeat the object of the provision and create unnecessary multiplicity of proceedings. The forfeiture order was therefore interfered with only to the extent of the refunded amount.

---

---

Issues: Whether the amount already refunded by the assessee to its customer could be forfeited under section 18-AA of the Karnataka Sales Tax Act, 1957.

Analysis: Section 18-AA is designed to prevent unjust enrichment by a dealer who collects tax in excess of the liability and retains it. The provision must therefore be applied to amounts actually kept by the dealer, and not to amounts that have already been returned to the person from whom they were collected. Once the assessing authority itself noticed that a substantial part of the excess collection had been refunded, there was no basis for forfeiting that returned amount. A hyper-technical construction that would force the customer to make a separate claim against the Department would defeat the object of the provision and lead to unnecessary multiplicity of proceedings.

Conclusion: The forfeiture could not stand in respect of the amount already refunded to the customer, and the assessee succeeded on that issue.

Final Conclusion: The order of forfeiture was interfered with only to the extent of the refunded amount, and the revision was allowed in part with consequential costs.

Ratio Decidendi: Forfeiture under section 18-AA applies only to tax collected and retained by the dealer, not to sums already refunded to the customer from whom they were collected.

---