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TMI Blog2003 (2) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent, but from April 1, 1993 it was reduced to four per cent. The assessee, in ignorance of this fact, collected sales tax at 10 per cent on sale transactions. Subsequently on being objected to by one of the customers the assessee sought clarification from the Commissioner of Commercial Taxes who by his letter dated February 15, 1994 clarified that the tax leviable is only four per cent. But by that time the assessee had collected Rs. 2,71,065 which was in excess of his tax liability and deposited the same with its monthly returns. After the said clarification, at the instance of one of the main purchasers M/s. Ashok Agencies, Bangalore, the assessee issued two credit notes in favour of the said customer in June 1994 for Rs. 1,96,659. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) the dealer liable to pay the amount shall pay interest at the rate of two and one half per cent of such amount for each month of default; and (iii) the whole of the amount remaining unpaid along with the interest calculated under clause (ii) of this sub-section shall be recoverable in the manner specified in section 13. (3) Notwithstanding anything contained in this Act, or in any other law for the time being in force, any amount paid or payable by any dealer under sub-section (1) shall, to the extent it is not due as tax, be forfeited to the State Government and be recovered from him and such payment or recovery shall discharge him of the liability to refund the amount to the person from whom it was collected. (4) Where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and held that: Section 37(1) does say that 'any sum collected by the person by way of tax . . . shall be forfeited . . .'. Literally read, the whole sum goes to the State. Let us suppose the dealer has returned the whole or part of the collections to the customers. Should the whole amount, regardless of such repayment, be forfeited? We think not. Section 37(1) uses the expressions, in relation to forfeiture, 'any sum collected by the person . . . shall be forfeited'. What does 'collected' mean here? Words cannot be construed effectively without reference to their context. The setting colours the sense of the word. The spirit of the provision lends force to the construction that 'collected' means ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the amounts under section 18-AA(3) is not to allow even the State to unjustly enrich itself. Keeping in view the benevolent object behind the impugned provisions, sincere efforts should be shown to have been made into carrying out the ultimate goal envisaged therein, namely, that amount shall be refunded to the person concerned provided: (i) an application in writing in the prescribed form is made to the Commissioner; (ii) the said application is made within two years from the date of the order of forfeiture; and (iii) on Commissioner's satisfaction, pursuant to an enquiry, that the claim is valid. Sri N.K. Ramesh, learned Additional Government Advocate representing the department has submitted that strictly construing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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