TaxTMI 
TaxTMI 
2011 (2) TMI 1341
X X X X Extracts X X X X
X X X X Extracts X X X X
....to before the Karnataka Appellate Tribunal. M/s. S.L.N. Coffee Curing Works, is a coffee curer and effecting sale of cured coffee. The assessment for the year 2003-04 was concluded on November 28, 2003. Thereafter the assessing authority noticed that the orders passed were erroneous. A portion of the turnover had escaped from assessment to tax. Though the assessee was a coffee curer and though he was liable to pay tax at the point of purchases, as per entry No. 3 of the Third Schedule to the Karnataka Sales Tax Act, 1957 for short, hereinafter referred to as "the KST Act", tax was levied on the local and inter-State sales turnovers. Levy was found to be wrong. Therefore, proceedings were initiated under section 12A of the Act and reasses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tified. Therefore, the said finding was affirmed. However, dealing with the second question, it held that there is no bar on the assessee to collect or recoup the taxes, which he has incurred at the time of purchase. The levy of tax is on the taxable turnover, which depends on the point of levy. It is nowhere mentioned that a dealer shall not collect any amount as tax on which he was made liable, to pay tax on the purchases. At the point of purchase, if the tax is levied, then only occasion for a dealer to collect tax arises when the latter is sold. The assessee, as a result of agreement collected tax at the same rate at which he was liable to pay. Though he is liable to pay tax on sales, it was made known to him that he was liable to pay t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sions. Per contra, the learned counsel appearing for the assessee contends that what the law prohibits is only collection of tax, when there is no liability to pay tax. When admittedly, there was liability cast on the assessee to pay purchase tax, if he has collected sales tax from the purchaser and paid tax to the Revenue, he cannot be found fault with on the ground that he has not paid the purchase tax. When the purchase tax and the sales tax are one and the same and when the assessee had not paid the purchase tax, he collected the sales tax and therefore he contravened no law. Therefore a case for invoking section 18AA is not made out. Therefore she submits that the impugned order does not call for interference. Therefore the only ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....said provisions it is clear that the assessee being a coffee curer, when he purchased coffee seeds/beans from unregistered dealers, he is liable to pay tax on such purchases at the point of purchase at the rates mentioned in column No. 4. Therefore the finding of the Tribunal that the order passed under section 12A foisting the said liability on the assessee is proper. It is not challenged by the assessee and it has attained finality. Now the only question is, instead of paying purchase tax, was the assessee justified in collecting tax at the point of sale and remitting the tax to the Revenue and could avoid consequences of section 18. In this regard it is necessary to look at section 18, which reads as under:- "18. Collection of tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... collecting tax on such sale. If he collects tax, it is in contravention of the statutory provisions and therefore, the said mischief falls within section 18 of the Act. Section 18AA deals with payment and disbursement of amounts wrongly collected by dealer as tax. It provides that where any amount is collected by way of tax or purporting to be by way of tax from any person by any dealer in contravention of section 18, whether knowingly or not, such dealer shall pay the entire amount so collected, to the assessing authority within twenty days after the dose of the month in which such amount was collected, notwithstanding that the dealer is not liable to pay such amount as tax or that only a part of it is due from him as tax under the Act....