2002 (9) TMI 826 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of Section 46A of the Kerala General Sales Tax Act, 1963 regarding forfeiture of excess tax collected by a dealer.
2. Assessment of tax liability when excess tax is collected and remitted to the Government by the dealer.
3. Applicability of the proviso to Section 46A(1) for refund of excess tax collected.
4. Authority of the assessing officer to demand excess tax paid by the dealer.

Analysis:

Issue 1: Interpretation of Section 46A
The revision petitioner argued that the assessing officer should have granted a refund of the excess tax collected rather than demanding it, as there was no provision in the Act or Rules during that year to demand collected tax. However, the Tribunal upheld the action of the assessing officer under Section 46A, which provides for the forfeiture of excess tax collection. The Court found that Section 46A clearly states that any tax collected in excess by a registered dealer is liable to be forfeited to the Government, with an exception under the proviso if the sum collected is returned to the person from whom it was collected.

Issue 2: Assessment of Tax Liability
The Court noted that the assessment was completed based on the return filed by the revision petitioner, who did not claim a refund of the excess tax paid. The assessing officer demanded the tax paid as "tax due" since there was no claim for a refund. The Court found that the officer had the power under Section 46A to demand the excess tax collected and paid, especially when the petitioner did not claim a refund voluntarily.

Issue 3: Applicability of Proviso to Section 46A(1)
The Court clarified that the proviso to Section 46A(1) applies when the excess tax collected is returned to the person from whom it was collected. Issuing credit notes later does not fulfill the requirement of returning the excess collection. Once the excess tax is remitted to the Government, the proviso is no longer applicable. The person from whom the excess tax was collected can apply for reimbursement under Section 46A(2) by furnishing a statement in the prescribed manner.

Issue 4: Authority of Assessing Officer
The Court found that the assessing officer had the authority to demand the excess tax collected and paid by the dealer under Section 46A. Since the petitioner did not claim a refund and voluntarily paid the amount, there was no necessity for the officer to issue a notice under Section 46A for forfeiture. The Tribunal's decision to uphold the order demanding excess tax was deemed legal and in line with the statutory powers conferred under the Act.

In conclusion, the Court dismissed the tax revision case, upholding the Tribunal's decision to demand the excess tax collected by the dealer and advising buyers to approach the officer for refund as per the rules.