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TMI Blog1988 (8) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of excess amount is not impermissible but what is not Permissible is realisation of excess amount as tax. The High Court noted that the assessee did not act fairly in this case. By way of price it realised from its customers more than what it was entitled to under Notification No. 4602 but in order to avoid any consequences under the Essential Commodities Act such as suspension or cancellation of its licence, etc., the excess realisation was shown as amount covered by Explanation II of the notification. On these facts the High Court found that the provisions of section 15-A(1)(qq) were not applicable. It has to be borne in mind that the imposition of a penalty under the Act is quasi-criminal and unless strictly proved, the assessee is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Roller Flour Mills (Ex-Mill Price Control) Order, 1975, fixing the ex-mill price of the sales of wheat products and also authorised the mills in the said notification to realise the proportionate amount of octroi, terminal tax, purchase tax or sales tax, duty or excise duty payable by the mills on the wheat crushed in addition to the fixed ex-mill price. The dealers have realised the amount of the wheat products as fixed by the U.P. Roller Flour Mills (Ex-Mill Price Control) Order, 1975, and have also realised the amount of the wheat sales tax or wheat purchase tax and octroi on the wheat used in the manufacture of wheat products, for the sale of atta, maida, suji, bran and refraction in accordance with the aforesaid notification. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash memos and the wheat products sold by the dealer, as part of the ex-mill price of the wheat product. The assessing authority had imposed the tax on this amount treating it as a part of the turnover of the dealer. But after the completion of the assessment, the Assistant Commissioner (Assessment) issued a notice under section 15-A(1)(qq) of the Act to show cause as to why penalty should not be imposed in respect of the realisation of wheat purchase tax and wheat sales tax during the aforesaid period. A reply was filed by the dealer to the said notice. The Assistant Commissioner by his order dated February 24, 1979, imposed a sum of Rs. 25,000 as penalty under section 15-A(1)(qq). Section 15-A(1)(qq) reads as follows: "(qq) realises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase tax from customers under notification but if it realised more than it was excess realisation by way of price, there would be breach of the Control Order for which no penalty could be levied under this Act. What the assessee has realised from customers was price and not tax. Section 15-A postulates as set out hereinbefore under clause (qq) certain conducts. As it is apparent from the provisions set out above, that the realisation must be by the dealer of the amount as sales tax or purchase tax where no sales tax or purchase tax was legally payable or in excess of the amount of tax legally payable under the Act. Therefore, it is necessary that realisation must be of the sales tax or purchase tax, secondly, that realisation must be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause read as follows: "(b) Where sales tax is payable on any turnover by a dealer [including a commission agent or any of the persons mentioned in the Explanation to clause (c) of section 21, registered under this Act, such a dealer may recover an amount, equivalent to the amount of sales tax payable, from the person to whom the goods are sold by him, whether on his behalf or on behalf of his principal." This is a method of realisation in case of indirect tax. Penalty can be levied or is leviable for realisation of excess of tax legally payable and not for contravention of section 8-A(2)(b). Realisation of excess amount is not impermissible but what is not Permissible is realisation of excess amount as tax. The High Court noted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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