1962 (11) TMI 31 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether sales tax collected by a dealer can be considered as part of the turnover as defined by law.
2. Interpretation of relevant case laws regarding the inclusion of sales tax in turnover.
3. Determining if sales tax collected formed part of the sale price in the specific case.

Detailed Analysis:
1. The appeal before the Kerala High Court involved a dispute regarding the refund of sales tax collected from a registered dealer by the State Government. The assessment order for the year 1950-51 considered the "net turnover" to include the sales tax collected from customers. However, a previous Division Bench decision clarified that sales tax collected is not part of the turnover as defined in the law. The court emphasized that the sales tax collected should not be considered as part of the sale price and can be passed on to customers separately.

2. The Government Pleader relied on a Supreme Court case, George Oakes (Private) Ltd. v. State of Madras, which suggested that sales tax collected could be part of the turnover. The Supreme Court's observations highlighted that sales tax collected may be treated as part of the price of goods sold, but the distinction between sale price and sales tax was not immutable. The court noted that the Supreme Court did not mandate that sales tax collected must always be deemed part of the sale price and turnover, emphasizing that each case's circumstances must be considered.

3. In the present case, the State Government failed to establish that the sales tax collected was part of the sale price. The assessment order and evidence indicated otherwise. Reference was made to a previous judgment where it was argued that the Supreme Court's observations overruled the earlier Bench decision. However, the court distinguished the cases based on the proper pleading by the State Government regarding the nature of sales tax collected. Ultimately, the court upheld the decree for the refund of sales tax, dismissing the appeal without costs.