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TMI Blog2004 (5) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the dealer-opposite party, a registered dealer, both under the U.P. and Central Sales Tax Act and it deals in mill stores, cotton tapes, etc. It purchased the goods from outside the State of U.P. and sold the same to the various persons within the State of U.P. by transfer of documents of title without taking the delivery of the goods. The assessing authority on scrutiny of the account books found that the dealer-opposite party has realised sales tax at the rate of 4 per cent. But the dealer did not admit any tax liability under the Central Sales Tax Act. In the assessment proceedings the dealer claimed and was granted exemption from Central sales tax on the basis of the form C and form E1 furnished by it. Consequently the penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STC 226; 1988 UPTC 1144. 4.. The dealer has made Central sales by endorsement of documents and it realised 4 per cent in the bills by mentioning it as surcharge. In reply to the show cause notice the dealer came out with the case that this realisation of the surcharge is only reimbursement from the customers of the amount of sales tax. The assessing authority has dealt with this point in the penalty order. To justify the levy of surcharge at the rate of 4 per cent uniformly from all customers, the dealer submitted that it is inclusive of various miscellaneous expenses, such as insurance charge, freight, packing charges, forwarding charges, etc. These items have been included in the turnover of the dealer and thus realisation of 4 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has been subjected to the Central Sales Tax Act . This is only discussion on the finding of this vital issue by one of the members of the Tribunal. The another member examined the matter in some detail and also has taken into consideration the documentary evidence, namely, the copies of the bills. He agreed that the conclusion of the assessing authority that the mention of the form C and realisation of amount at the rate of 4 per cent indicates that the amount was realised towards the Central sales tax which was not attracted due to form E1 and form C. Due to forms E1 and C no Central sales tax could be levied on the dealer. Further the delivery of goods was not taken by the dealer-opposite party and as such the question of alleged fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or purchase tax, where no sales tax or purchase tax is legally payable or in excess of the amount of tax legally payable under this Act; 7.. It is apparent from the above that for levy of penalty three things are required to be established. Firstly, realisation must be as sales tax or purchase tax. Secondly, it should be in excess and thirdly the amount of tax should not be legally payable under the Act. The Supreme Court has interpreted the aforesaid provision in the case of Mool Chand Shyam Lal [1988] 71 STC 226; 1988 UPTC 1144. The facts of that case are to be noticed briefly to understand the controversy involved therein. In that case the assessee was entitled to realise the price and purchase tax from customers under Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount equivalent to the amount of sales tax payable from the person to whom the goods are sold by him. To put it differently, if no tax was payable by such registered dealer he is not entitled to recover any amount from the person to whom the goods are sold by him. 9.. The realisation of any amount as sales tax or purchase tax, where no sales tax or purchase tax is legally payable or in excess of the amount of tax legally payable attracts the penal provision of section 15-A(1)(qq) of the Act. The observation of the Supreme Court in para 6 of the above case Mool Chand Shyam Lal [1988] 71 STC 226; 1988 UPTC 1144 is as follows: Realisation of excess amount is not impermissible but what is not permissible is realisation of excess amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of assessment and in fact even before the assessment proceedings had been initiated; he was of the opinion that the penalties contained in the State sales tax laws shall apply only in relation to the assessment, reassessment, collection and reinforcement of payment of any tax. This is crux of the said judgment. However, the Supreme Court in the aforesaid case of Shiv Dutt Rai Fateh Chand [1983] 53 STC 289; 1983 UPTC 920 has dealt with this matter in great detail and has come to the conclusion that the Parliament adopts provisions relating to the penalties of the general sales tax laws of the States for enforcing the charge under the Act. The aforesaid judgment of the honourable Supreme Court is binding on me and I have no option but t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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