1988 (8) TMI 383

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..... (1980) 4 SCC 451, wherein it is held: "From the observations made in the decisions referred to above, it follows that where a dealer is authorised by law to pass on any tax payable by him on the transaction of sale to the purchaser, such tax does not form part of the consideration for purposes of levy of tax on sales or purchases but where there is no statutory provision authorising the dealer to pass on the tax to the purchaser, such tax does form part of the consideration when he includes it in the price and realises the same from the purchaser. The essential factor which distinguishes the former class of cases from the latter class is the existence of a statutory provision authorising a dealer to recover the tax payable on the transac .....

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..... d by the dealer to the purchaser is not collected by him as an agent of the State. Even if, therefore, the bill or the voucher issued to the purchaser indicates the amount of sales tax separately what is collected by the dealer from the purchaser is not tax but is merely a part of the sale price charged by the dealer to the purchaser. So far as the statute is concerned it does not cast any obligation on the purchaser of the goods to pay any tax and therefore, what is collected by the dealer from the purchaser by way of consideration for passing the property in the goods to the purchaser is the price charged by him and not tax collected by him from the purchaser. The amount of money which goes from the pocket of the purchaser to the pocket .....

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..... directly under the authority of section 17(iii) (b)(1) of the said Act and to pass it on or make it over to the market committee. It is evident that it was an amount collected by the dealer under the statutory authority as an agent of the market committee for being passed on to the management committee and therefore, could not be treated as a component of the sale price of the goods which were sold to the purchaser." The learned Government Pleader placed reliance on a decision of the Supreme Court reported in Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1987] 65 STC 172, wherein the court was concerned with the amount of insurance paid to the dealer by the buyer covering the transit risk, whether to be included in .....

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