1967 (10) TMI 55

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.... sales tax on the sales and the demand was in respect of such collection, the department relying on rule 4-A(iv) of the Central Sales Tax (Madras) Rules, 1957. The Tribunal's view was that the rule is within the competency of the State Government under section 13(3) of the Central Sales Tax Act. It dealt with the question of vires of the rule on the impression that section 9A as well as the rule covered collection by a registered dealer of an amount for which there is no liability to pay as tax under the Act. On the view we take of the scope of section 9A and rule 4-A, no question of vires of the rule arises. Section 9A reads: "No person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of ....

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.... such sum at the time and in the manner specified therein." The question is whether the language of section 9A justifies the interpretation that it covers any amount collected by a registered or unregistered dealer in respect of which there is actually no tax liability under the charging provision of the Act. The expression "any amount by way of tax" should, in our opinion, be understood in the context of the words that follow, "under the Act". So read what is contemplated, as it appears to us by the section, is collection of an amount in respect of which there is liability to pay as tax under one or the other provision of the Act. To put it differently the section does not cover an amount for which there is no liability under the Act to....

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....owers of the State Legislature. The section itself made it beyond doubt that it covered an amount by way of tax collected otherwise than in accordance with the provisions of the Act. It was because of this the competency of such a provision was considered and decided. Indian Steel Rolling Mills Ltd. v. Commercial Tax Officer[1965] 16 S.T.C. 285. dealt with the very section 9A of the Central Sales Tax Act. But the learned Judge, if we may say so with respect, assumed that the section covered an amount for which there was no liability to pay tax under the provisions of the Act. Tata Iron and Steel Co. Ltd, v. State of Madras[1954] 5 S.T.C. 382 at 387. was cited before the learned Judge. But he distinguished it and Abdul Quader and Co. v. Sale....