1962 (10) TMI 41

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.... State could not be part of his turnover and therefore was not assessable to tax. The state, on the other hand, supporting the impugned order of assessment, contended that "the sales tax collected with the sale value formed part of the turnover which is the aggregate amount for which goods are either bought or sold by a dealer." The Additional District Judge, following a ruling of the Travancore-Cochin High Court reported in Velayudhan v. Agricultural Income-tax and Sales Tax Officer[1953] 4 S.T.C. 338; A.I.R. 1953 T.C. 618. accepted the plaintiff's plea and decreed the suit. Hence this appeal. 2.. The only question that materially arises for consideration is whether the sales tax collected by the dealer from his customers would be part ....

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....y him for and on behalf the State and his obligation was to make it over to the State on whose behalf he made the collection. No part of the money collected by way of sales tax belongs to him" and that decision was accepted on appeal by a Division Bench of the Travancore-Cochin High Court (Agricultural Income-tax and Rural Sales Tax Officer, Perumbavoor v. Velayudhan[1954] 5 S.T.C. 285; I.L.R. (1955) T.C. 181.), who observed: "We are not concerned in this case with a registered dealer charging a composite or 'tax included' price but one who collects separately the price for his commodity and the sales tax thereon." The indication there is that the tax, separately collected as tax, cannot be viewed as part of the price of the goods sol....

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....r. If the buyer agrees to the price, it is-not for him to consider how it is made up or whether the seller has included tax or not.' We think that these observations are apposite even in the context of the provisions of the Acts we are considering now, and there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax, that cannot be part of the sale price. So far as the purchaser is concerned, he pays for the goods what the seller demands, viz., price even though it may include tax. That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turnove....