Supreme Court of India
K.L. Johar & Co. vs Assistant Commissioner Of Sales Tax ... on 24 July, 1980
Equivalent citations: AIR1980SC1567, 1980SUPP(1)SCC320, [1981]47STC313(SC), 1980(12)UJ747(SC), AIR 1980 SUPREME COURT 1567, 1980 TAX. L. R. 1762, 1980 S T I 449 (1) (SC), 1980 UJ(SC) 747
Author: R.S. Pathak
Bench: O. Chinnappa Reddy, R.S. Pathak
JUDGMENT R.S. Pathak, J.
1. Both these writ petitions have been filed under Act. 32 of the Constitution against assessments made under the Kerala General Sales Tax Act, 1963 by the Assistant Commissioner of Sales Tax (Assessment) Special Circle, Ernakulam for the assessment years 1970 71 and 1971-72 respectively. The petitioner contends that the assessing authority has acted without power in its total turnover certain amounts recovered by the petitioner from its customer as tentative deposits on the sale of goods made to them.
2. It appears that the petitioner sells liquor and on some sales of liquor it not only charged the purchasers for freight and excise duly but aha included in the bills a certain amount by way of "deposit" to be charged as tax in the event of freight and excise duty being included in the total turnover for the purpose of assessment. In the assessment orders, the assessing authority did not clearly pronounce on the true nature of amounts recovered by way of deposit but it is now not disputed that the deposits were in fact recovered by the petitioner as alleged by it. It is also noc disputed that the amounts recovered by way of freight and excise duty includible in the total turnover of the petitioner for the purpose of sales tax. In the circumstances, it is clear that the "deposit" amounts must be regarded as sales tax-recovered by the petitioner and payable to the Revenue. Indeed, it is admitted between the parties that the amounts have since bean paid over and realised by Revenue. That being so Rule 9(1) of the Kerala General Saks Tax Rules comes into operation and in accordance with it the amounts recovered as deposit by the dealer and now found to represent sales-tax, be deducted from assessment to sales-tax.
3. In the circumstances the writ petitions are allowed and the assessment orders are quashed insofar as they include tbe amounts recovered as "deposits" in the total turnover of the petitioner for the assessment years 1970-71 and 1971-72. There is no order as to costs.