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TMI Blog1988 (3) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1975-76 the amount is Rs. 2,09,028.96. The facts: The petitioner is a co-operative society and deals in grocery and other articles. The assessing officer enhanced the taxable turnover by Rs. 81,156.95 for the assessment year 1973-74, Rs. 1,27,897.72 for 1974-75 and Rs. 2,09,028.96 for 1975-76, on the ground that the petitioner was not entitled to claim deduction of the above amounts representing the amounts of sales tax realised from its purchasers. The petitioner succeeded before the Appellate Assistant Commissioner in appeal but on appeal by the Revenue, the orders of the assessing officer were restored by the Tribunal. Undisputedly, in the sale memos, the petitioner had not shown the price of the goods and the amount of sales tax realised on the sales, separately. The stand of the assessee has been that sales tax was included in the sale price which was, however, bifurcated and shown separately in the books of accounts and accordingly that should not have been excluded from the gross turnover. The Tribunal was of the view that if any amount was realised by the dealer towards the tax, then that was to be excluded from the gross turnover for the purpose of determining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be, signed by the dealer or his servant, manager or agent, to the purchaser showing separately the price of the goods sold and the amount realised or stipulated for realisation by way of tax and shall keep a counterfoil duly signed and shall further maintain a true and correct account of all moneys realised or stipulated for realisation by him by way of tax in the prescribed manner. Provided.............." Thus this provision enjoins upon a registered dealer to issue cash or credit memos, showing separately the price of the goods sold and the amount realised, if any, as tax from the purchasers. Sub-section (3) empowers the Commissioner to impose penalty in the prescribed manner on a person who contravenes the provisions of subsection (1). In the year 1983 only by Act 23 of 1983 sub-section (3) was substituted and as the sub-section stands now sub-section (3)(b) empowers the Commissioner to impose penalty in the prescribed manner on a person who contravenes the provisions of sub-section (1)(b) or sub-section (2) noticed above besides the punishment contemplated under section 25 of the Act. We have seen that on account of this provision contained in section 9-B(2), the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be affected. It is somewhat remarkable that the taxing authorities jumped to a rash conclusion that deduction is not permissible unless the realisation of tax is shown separately in the cash or credit memos. The provision is merely for easy collection of the tax realised. Non-adherence to the prescription in respect of the cash or credit memos does not entail any penal or other consequence. In the absence of such provision, a taxing statute must be construed in favour of the subject, i.e., the dealer or the assessee." I must however observe that Shri R.B. Ray, learned Advocate appearing for the petitioner, could hardly assist us save and except placing the above decision. The learned Standing Counsel could not point out any apparent doubt in the view already taken by this Court and made a halfhearted submission that it was not correctly decided. We have, however, given our anxious consideration to the situation considering its importance and consequences and I would like to discuss in some detail for agreeing with the earlier view of this Court. Section 5(2)(A)(b), already extracted above, entitles a registered dealer to deduct from his gross turnover the amount of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken to have substantially complied with the conditions set out in the executive instructions of the Board of Revenue (S.O. 13), which provided that if sales tax collected was separately shown, the dealer would be entitled to the exclusion of that amount from the taxable turnover." Now I may refer to some decisions of other High Courts. A similar view was taken by the Kerala and the Patna High Courts in (1) Deputy Commissioner of Agricultural Income-tax and Sales Tax, South Zone, Quilon v. S. Veeriah Reddiar [1962] 13 STC 930 and (2) Tata Iron and Steel Co. Ltd. v. State of Bihar [1956] 7 STC 158. In the second case it was observed: "The amount collected by the registered dealer from the customers as sales tax and paid over to the Government cannot be treated as part of the sale price under section 2(h) and so does not constitute part of the taxable turnover of the registered dealer." Then again the Patna High Court in Radha Krishna Surajmal v. Commissioner of Commercial Taxes, Patna [1979] 43 STC 203 made the following observation: "Therefore, for claiming the deduction in terms of sub-sections (1)(b) and (2)(a)(ii) of section 7 of the Act, all that is necessary is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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