Tax passed on to buyers can justify forfeiture, and refund is limited to excess over actual liability.

Tax collected from purchasers may be treated as tax-inclusive even without a separate entry in the sale bills or books, where the assessment records, accounts and comparable dealings show that the burden was passed on; on that basis, forfeiture under the Karnataka Sales Tax Act was sustained. A remand was not required merely because the Commissioner examined additional material, since the existing record supported the conclusion and the statutory appeal provided adequate protection. Refund was confined only to the extent the amount paid exceeded the actual tax liability, with forfeiture maintained for the balance.

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Issues: (i) whether the assessee had collected sales tax from customers so as to justify forfeiture of the amount under the Karnataka Sales Tax Act, 1957 and deny refund; (ii) whether the Commissioner was required to remand the matter for fresh consideration on the ground that additional material had been examined.

Issue (i): whether the assessee had collected sales tax from customers so as to justify forfeiture of the amount under the Karnataka Sales Tax Act, 1957 and deny refund.

Analysis: The assessment records, the statement of purchase and sales, the profit and loss account, and the comparison with other dealers were relied upon to show that the turnover was treated as tax-inclusive. The absence of a separate entry in the sale bills or books was not decisive, because the surrounding materials indicated that the tax burden had been passed on to purchasers. On that basis, the finding that the amount was wrongly collected and liable to forfeiture was held to rest on legal evidence.

Conclusion: The finding that the assessee collected tax from customers was upheld, and forfeiture was sustained to that extent.

Issue (ii): whether the Commissioner was required to remand the matter for fresh consideration on the ground that additional material had been examined.

Analysis: The dispute was not one of reassessment but of whether the assessee had passed on the tax burden. The Commissioner had jurisdiction to examine the material and correct an order prejudicial to the Revenue, and the availability of a statutory appeal against that order was sufficient protection. A remand was not necessary merely because some additional material was considered, particularly when the existing record itself supported the conclusion.

Conclusion: The contention for remand was rejected.

Final Conclusion: The appeal failed substantially, but the assessee was entitled to refund only to the limited extent that the amount paid exceeded the actual tax liability, with forfeiture sustained for the balance.

Ratio Decidendi: Where the record shows that tax was passed on to purchasers, the amount is liable to forfeiture notwithstanding the form in which it was entered in the sale bills or books, and limited refund is permissible only for any amount shown to be paid in excess of the actual liability.

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