Tax collection disclosed in returns cannot later be denied as an accounting split-up; forfeiture provisions apply on declared collection.

Amounts disclosed in a dealer's returns as tax collected and remitted cannot later be denied that character by describing them as a mere accounting split-up or computer-generated entry. The disclosed collection in the returns was treated as the operative factual basis, and the dealer could not resile from its own declarations simply because the goods were later found exempt or taxable at nil rate. On that footing, forfeiture under section 18AA of the Karnataka Sales Tax Act, 1957 was attracted, and section 18AA(4) was inapplicable because the provision contemplates relief only where an amount has in fact been collected as tax and later falls outside tax liability.

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Issues: (i) Whether amounts shown in the dealer's returns as tax collected and remitted could be denied the character of tax collection on the plea that, in substance, they formed part of the sale price and therefore were not liable to forfeiture under section 18AA of the Karnataka Sales Tax Act, 1957. (ii) Whether section 18AA(4) of the Karnataka Sales Tax Act, 1957 could be invoked to claim relief in the facts of the case.

Issue (i): Whether amounts shown in the dealer's returns as tax collected and remitted could be denied the character of tax collection on the plea that, in substance, they formed part of the sale price and therefore were not liable to forfeiture under section 18AA of the Karnataka Sales Tax Act, 1957.

Analysis: The returns themselves disclosed the collection of tax and the remittance of that amount to the State. The explanation that the entries were only a computer-generated split-up or an accounting presentation, and that no tax had in fact been collected from purchasers, was inconsistent with the dealer's own declarations. Once the dealer had represented the amount as tax collected and claimed the corresponding treatment in the returns, it was not open to resile from that position merely because the product was later found to be exempt or taxable at nil rate. The factual finding recorded by the authorities was that tax had been collected as shown in the returns, and that finding did not call for interference.

Conclusion: The plea that no tax had actually been collected was rejected, and forfeiture under section 18AA of the Karnataka Sales Tax Act, 1957 was held to be attracted.

Issue (ii): Whether section 18AA(4) of the Karnataka Sales Tax Act, 1957 could be invoked to claim relief in the facts of the case.

Analysis: Sub-section (4) operates where an amount has in fact been collected as tax and later found not to be tax, so that the statutory refund mechanism may be attracted. On the facts found, the dealer's stand that there had been no collection at all was not accepted, and the dealer was estopped from advancing a contrary position after having declared the amounts as tax in its returns. The provision therefore had no application to the case.

Conclusion: Section 18AA(4) of the Karnataka Sales Tax Act, 1957 was held inapplicable.

Final Conclusion: The revision petitions failed because the dealer could not disown its own tax declarations in the returns, and the statutory forfeiture and related relief provisions did not assist it.

Ratio Decidendi: A dealer who has disclosed and remitted an amount as tax in its returns cannot later deny that collection by characterizing it as a mere accounting split-up or computer-generated entry, and the forfeiture provisions apply on the basis of the collection so declared.

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