Statutory tax collection by low-turnover registered dealers needs no prior permission; approval rules apply only to optional tax-payment cases.

A registered dealer below the turnover threshold could collect and remit tax without prior permission, because section 6(1A)(a) treated such collection as a statutory consequence rather than a permission-based privilege, and no penalty could arise on that basis. Rule 10A and form 1F were held applicable only to dealers covered by section 6(1A)(b), where the statute contemplated an option to pay tax subject to approval; they did not apply to section 6(1A)(a) dealers. The prescribed form was therefore found inadequate as drafted, the penalty was set aside, input-tax credit was to be granted, and the form-making authority was directed to prescribe a proper form.

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Issues: (i) Whether a registered dealer having turnover below the non-taxable limit could collect and remit tax without obtaining prior permission. (ii) Whether rule 10A and form 1F applied to a dealer covered by section 6(1A)(a) or only to dealers covered by section 6(1A)(b).

Issue (i): Whether a registered dealer having turnover below the non-taxable limit could collect and remit tax without obtaining prior permission.

Analysis: Section 6(1A)(a) dealt with the consequence of a registered dealer below the threshold collecting tax under section 30, and did not create a separate requirement of prior approval. The scheme of the Act recognized that a registered dealer may collect and remit tax even where turnover was below the limit, with the consequence that tax would be payable on the taxable turnover. The Court treated such collection and remittance as a permissible statutory course and not an illegality attracting penalty.

Conclusion: The dealer was entitled to collect and remit tax without prior permission, and no violation arose on that account.

Issue (ii): Whether rule 10A and form 1F applied to a dealer covered by section 6(1A)(a) or only to dealers covered by section 6(1A)(b).

Analysis: Clause (b) concerned dealers whose goods were exempt at the point of sale and who were given an option to pay tax, enabling the authorities to grant or refuse permission on application. Clause (a), by contrast, merely stated the consequence for a registered dealer below the threshold who collected tax. Reading the rule, the form, and the circular together, the Court held that prior permission and form 1F were intended only for the class covered by section 6(1A)(b), and not for registered dealers falling under section 6(1A)(a). The prescribed form was therefore found to be incomplete in its present form.

Conclusion: Rule 10A and form 1F did not apply to dealers covered by section 6(1A)(a), and the form required correction to suit section 6(1A)(b).

Final Conclusion: The assessee succeeded in the revision and the writ petition. The penalty was set aside, the assessment was to be modified by granting input-tax credit, and the authorities were directed to prescribe a proper form for rule 10A.

Ratio Decidendi: Where the statute treats collection of tax by a registered dealer below the turnover threshold as a recognised consequence rather than a conditional permission-based privilege, prior approval cannot be imported by rule for that category; an approval mechanism applies only where the statute expressly creates an option subject to acceptance by the authority.

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