TaxTMI 
TaxTMI 
1999 (9) TMI 915
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....ee by mistake collected sales tax and surcharge on taxsuffered goods and after the mistake being pointed out by the assessing authority, the assessee refunded the money by issuing credit notes in the month of April, 1980. This fact was referred to in the order of the Appellate Tribunal and when the entire amount collected as tax and surcharge has been refunded, there is no case to levy any penalty. In this connection, he referred to the decisions reported in R.S. Joshi, Sales Tax Officer, Gujarat v. Ajit Mills Limited [1977] 40 STC 497 (SC), Amrutanjan Limited v. State of Tamil Nadu [1995] 97 STC 575 (Mad) ; (1994) 6 MTCR 562 and State of Tamil Nadu v. K. Mohammed Ibrahim Sahib [1991] 83 STC 402 (Mad). Mr. D.T. Chopda, the learned counsel f....
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.............. and, in addition, ............. any sum collected by the person by way of tax in contravention of section 46 shall be forfeited to the State Government". In that context, the following observations were made: "If a dealer merely gathered a sum by way of tax and kept it in suspense account because of dispute about its taxability or was ready to return it if eventually it was found to be not taxable, it was not collected within the meaning of section 37(1). The spirit of the provision lends force to the construction that 'collected' means 'collected and kept as his' by the trader". 4.. Similarly, in the case of State of Tamil Nadu v. K. Mohammed Ibrahim Sahib [1991] 83 STC 402, the Madras High Court considered the case of "de....
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....he original sale amount was in order, inasmuch as the rebate in question was given only at the end of the year. On that basis, it was held that penalty under section 22(2) of the Act was not exigible. Having held so, the Tribunal gave a direction to the assessing officer to ascertain whether the assessee has refunded the sales tax and surcharge collected by the assessee on the amounts given by way of rebate and cash discount to its stockists and if the assessee has not refunded the amount collected by way of surcharge and sales tax, then the assessing authority was directed to levy penalty under section 22(2) of the Act. Thus, the point for consideration before the High Court was whether the Tribunal was justified in giving such direction t....
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....s ledger. Thus, the collection of sales tax on second sales goods is a clear violation of section 22(1) of the Tamil Nadu General Sales Tax Act, 1959. The amount collected as sales tax and surcharge on second sales goods were retained by the assessee and it was not remitted to the Government as has been the case in the various decisions relied on by the learned counsel for the petitioner. Though the assessing authority levied a penalty of Rs. 28,476, the Appellate Assistant Commissioner reduced the quantum of penalty to 100 per cent. However, in the second appeal, the Sales Tax Appellate Tribunal has taken into consideration, the credit notes passed in the accounts subsequent to levy of penalty and has further reduced the quantum of pena....
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....for his own purpose. But, for the detection by the assessing authority, the illegal collection would not have come to light. Therefore, for want on collection of tax and surcharge on second sales goods, the assessing authority has rightly invoked section 22(2) of the Act. After levy of penalty, to escape from the penalty or to reduce the rigour of the punishment, the assessee has chosen to issue credit notes and exhibit the same in the accounts. In fact, the Sales Tax Appellate Tribunal has not recorded any finding regarding any amount having been received by the purchaser of goods. We are of the firm opinion that passing of credit notes alone would not be equated with actual refund of amount to the purchasers. As far as this case is concer....