TaxTMI 
TaxTMI 
TaxTMI 
1961 (10) TMI 69
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.... levy was the first sale which was changed to the last purchase under the aforesaid provisions. The petitioner was purchasing the goods both from the Bhadravati iron and Steel Works situated within the State and from others outside the State. Even after the coming into force of the Act, the Iron and Steel Works, Bhadravati, which is a Government concern continue to collect from the petitioner along with the price, tax calculated as if the levy continued to be at the point of sale. When the petitioner protested stating that no such levy could be made after the Act came into force on 1st October, 1957, the Bhadravati Iron and Steel Works appears to have told him that in the opinion of the Sales Tax Assessing Authority at Bhadravati, the Iron ....
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....y way of tax and for paying over the same to the Government. The third sub-section deals with what are described as collections by the dealers of amounts by way of tax in excess of the amounts payable by them and requires such dealers to pay over the amounts so collected to the Government. That subsection reads as follows: "If any person collects any amount by way of the tax in contravention of the provisions of sub-section (1) or (2) or if any registered dealer or licensed dealer collects any amount by way of tax in excess of the amount payable by him, the amounts so collected shall, without prejudice to any prosecution that may be instituted against such person or dealer for any offence under this Act, stand forfeited to the State Govern....
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.... had collected from the parties dealing with them certain sums of money setting them apart under the heading "contingent deposits", that is. to say, deposits to be dealt with according to the contingency of the transactions being subjected to such tax or not. In those cases the department accepted the correctness of the contention put forward by the assessee that the Government was not entitled to collect the amounts under any of the provisions of the Sales Tax Act, in view of the decision of the Supreme Court reported in The State of Mysore and Another v. Mysore Spinning and Manufacturing Co., Ltd. and Another(1). It is argued that the same principle should apply to the collections made by the assessee in these cases also. The distinction....
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....Ltd. v. The State of Bombay and OthersA.I.R. 1958 S.C. 328. , the principles stated in which are, in our opinion, directly applicable to the facts and circumstances of these cases. In that case, their Lordships considered the constitutionality of certain of the provisions of the Bombay Labour Welfare Fund Act of 1953. That Act constituted a fund called the Labour Welfare Fund and vested the same in a board of trustees for being applied for the welfare of workmen in the manner set out in that Act. That fund was to consist of certain specified items of money, one of which was "unpaid accumulations", that is to say, wages payable by an employer to his employees which remained with him unpaid to or unclaimed by the employees. The argument was ....
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.... bargain undertakes himself to discharge the liability to pay the taxes which in normal circumstances would rest upon the dealer. Whichever way you look at it the amount so collected is liable to be paid to the Government as and for sales tax payable under the statute. The position of the dealer in those circumstances would be more or less like that of an agent of the Government for collection of taxes. But no such position can be postulated in cases where the amount collected by the dealer from his customers does not or cannot represent tax payable to the Government in respect of the transactions in question. Although the dealer might have collected this amount in anticipation of or against the contingency of his being made liable to pay s....
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....in the money belongs ultimately to the customer; whether or not some special property in it may vest in, the dealer it is beyond doubt that no rights in respect of it can vest in the Government by reason only of the fact that the occasion for the collection was in some doubt regarding the liability of the transactions to sales tax. When, therefore, section 18(3) purports to forfeit these sums to the Government, what it actually does is to deprive either the customer or the dealer or both of their property in respect of the moneys which is in direct contravention of Article 19(1)(f) of the Constitution. The result, therefore, is that sub-section (3) of section 18 of the Mysore Sales Tax Act (Mysore Act No. 25 of 1957) is declared unconstitut....