2006 (11) TMI 323 - SC - VAT and Sales Tax

Whether the sale price was the consideration receivable by the dealer which was fixed by the Government of India or the amount the dealer was required to collect by way of consideration plus amount payable to the Oil Pool Account Held that - The Senior Superintendent of Taxes arrives at a definite conclusion that the appellant-company had, in fact, collected sales tax on the entire sales, then the appellant-company would deposit the entire sales tax amount collected from the consumers with the respondent-State within four weeks' of the order passed by the Senior Superintendent of Taxes along with nine per cent interest from the date of collecting the amount towards sales tax till payment. If the amount, as directed, is not paid by the appellant-company within the stipulated period, the same would be recovered as the arrears of land revenue by the respondent-State.

Summary

Issues Involved:
1. Inclusion of surcharge in the sale price for tax calculation.
2. Double taxation on the same goods.
3. Adjustment of sales tax already paid.
4. Collection and misappropriation of sales tax.

Issue-wise Detailed Analysis:

1. Inclusion of Surcharge in the Sale Price for Tax Calculation:
The appellant contended that the surcharge collected and remitted to the "Oil Pool Account" should not be included in the sale price. The High Court had ruled that the surcharge was part of the sale price as defined under section 2(34) of the Assam General Sales Tax Act, 1993, and thus taxable. The Supreme Court examined the statutory provisions and concluded that the surcharge collected on behalf of the Central Government must be included in the sale price for tax purposes.

2. Double Taxation on the Same Goods:
The appellant argued that levying sales tax on the resale price after already paying tax on the purchase price amounted to double taxation. The Supreme Court agreed, stating that section 8(1) of the Act did not envisage double taxation. The tax should only be levied on the difference between the resale price and the purchase price to avoid double taxation.

3. Adjustment of Sales Tax Already Paid:
The appellant claimed that they should be liable to pay sales tax only on the differential amount between the purchase price and the resale price. The Supreme Court upheld this view, emphasizing that the appellant had already paid sales tax on the purchase from BRPL and should only pay tax on the differential amount to prevent double taxation.

4. Collection and Misappropriation of Sales Tax:
The respondents alleged that the appellant collected sales tax on the entire resale price but did not deposit it with the State Government, amounting to misappropriation. The Supreme Court remitted the matter to the Senior Superintendent of Taxes to ascertain whether the appellant had indeed collected sales tax on the entire amount. If it was found that the appellant collected the tax, they were directed to deposit the amount with interest. The court emphasized the need for a factual determination of this issue by the tax authorities.

Conclusion:
The Supreme Court directed the Senior Superintendent of Taxes to investigate the factual controversy regarding the collection of sales tax on the entire resale price. If it was confirmed that the appellant collected sales tax on the full amount, they were to deposit it with the State Government along with interest. The appeal was disposed of with instructions to avoid double taxation and ensure proper tax collection and remittance.