TaxTMI 
TaxTMI 
1983 (4) TMI 239
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....1972 (Act No. 8 of 1972) provision was made for imposition of a tax similar to sales tax which is known as turnover tax. From 1st May, 1976, the turnover tax became a part of the M.P. General Sales Tax Act, 1958, by insertion of section 7-B by Ordinance No. 5 of 1976 which also repealed Act No. 8 of 1972. New section 7-B was substituted in the Sales Tax Act by Act No. 23 of 1977 with effect from 1st May, 1977. Under the new section 7-B nomenclature of tax has been changed from turnover tax to surcharge. Section 12 of the Sales Tax Act authorises the Government to grant exemption in whole or in part from payment of tax under the Act. The expression "tax" is defined in section 2(q) to mean tax payable under the Act. By notifications dated 28t....
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....hing in the said notifications shall be construed to grant exemption from payment of turnover tax or surcharge as the case may be, under section 7-B, at any time after the 1st May, 1976, during the operation of the said notification and accordingly,- (1)(a) a dealer who has collected the turnover tax or surcharge but has not paid it to Government shall be liable to pay it to Government; (b) a dealer who has not collected the turnover tax or surcharge shall not be liable to pay the same to the Government; (c) a dealer who has collected the turnover tax or surcharge and has paid it to Government shall not be entitled to claim a refund of the amount so paid on the ground that he was not liable to pay the same during the relevant perio....
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....not be liable to pay the same to the Government, whereas a dealer who has collected the turnover tax or surcharge but has not paid it to the Government shall be liable to pay it to the Government, and similarly a dealer who has collected turnover tax or surcharge and has paid it to the Government shall not be entitled to claim a refund of the amount so paid. By clause (2) the burden of proving that no turnover tax or surcharge was collected is placed on the dealer. 4.. As earlier mentioned by us, the two notifications under section 12 of the Sales Tax Act with which we are concerned in these petitions were issued respectively on 28th March, 1969, and 4th March, 1976, before insertion of section 7-B. The intention in issuing those notific....
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....rnment. It is not in dispute that turnover tax or surcharge levied under section 7-B partakes the character of sales tax and the State Legislature was competent to enact that section under entry 54 of List II. It is well-settled that while levying a tax the legislature can make incidental and ancillary provisions. The impugned section 16 is such a provision and we do not find any invalidity in it. 5.. The argument of the learned counsel for the petitioners is that section 16 seeks to tax the collections made by the dealers of turnover tax or surcharge which they were not liable to pay to the Government. This argument proceeds on a misreading of section 16. As earlier pointed out by us, the dealers were already liable for payment of turno....
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....cer v. Ajit Mills Ltd. [1977] 40 STC 497 (SC) which upheld the validity of an enactment providing for forfeiture of the amount collected by a dealer as tax which he was not entitled to collect. Section 16 with which we are concerned is neither a provision which taxes an amount simply because it had been collected nor a provision seeking to forfeit the collections illegally made by the dealers. Section 16 merely seeks to enforce the liability under section 7-B by clarifying the notifications issued under section 12 and it grants relief to those dealers who had not collected turnover tax or surcharge for which they were liable because of mistaken notion as to the effect of the notifications. 6.. It was then contended that under the M.P.....
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....tax or surcharge as part of the price, it would be apparent that he has collected the same. In other cases, however, a dealer can show that he has collected only that amount which was normally to be charged as price without taking into account the liability of turnover tax or surcharge. If he is able to show that it would be said that he did not collect the turnover tax or surcharge within the meaning of section 16. The burden is, however, on the dealer to prove that he has not collected the turnover tax or surcharge in the manner explained above. If he is able to discharge that burden, he would not be liable to pay any turnover tax or surcharge, as provided in clause (1)(b). 7.. There was also some argument that the classification of de....