Decided on December 14,1982



Jeevan Reddy, J. - (1.) This tax revision case arises from the order of the Sales Tax Appellate Tribunal affirming the orders of the Assistant Commissioner, Commercial Taxes, Guntur, whereunder the assessees claim for deduction of a sum of Rs. 2,23,439 under section 8A of the Central Sales Tax Act was disallowed.
(2.) For the assessment year 1970-71, the assessee-petitioner entered into several inter-State transactions of sale of cotton. With respect to a turnover of Rs. 9,50,201.57, it showed the Central sales tax collected by it separately in the bills. The authorities have, in the light of the proviso to section 8A(1), taken into account only the net turnover for the purpose of levying the Central sales tax. With respect to the turnover of Rs. 76,71,405.75 however the petitioner did not show the Central sales tax separately to its bills, but claimed deduction on account of Central sales tax in accordance with the formula contained in section 8A(1). Its contention was that irrespective of the fact whether the turnover is shown to be inclusive of Central sales tax or not, it is entitled to such deduction. This has been negatived by the authorities including the Tribunal. The Tribunal observed that the object behind section 8A is to avoid tax on tax and for that purpose Central sales tax collected by a dealer is deducted for the purpose of determining the turnover upon which alone Central sales tax will be levied and collected. It observed that for attracting the formula contained in section 8A the dealer must establish that the aggregate sale price is inclusive of sales tax. Otherwise, it observed, it will have the effect of reducing the sale price, which is not the intention behind the provision. This view of the Tribunal is challenged in this tax revision case.
(3.) Mr. S. Dasaratharama Reddi, learned counsel for the petitioner, contends that the formula contained in section 8A(1) does not expressly say that the "aggregate of sale price" mentioned therein should be shown to include Central sales tax. He contends that whether the assessee establishes that the sales price includes Central sales tax or not, the formula should be applied and net turnover determined, after deducting the Central sales tax component. He submits that a taxing statute should be literally construed and that there is no room either for equity or for supplying words which are not there in the statute. Section 8A(1), in so far as it is relevant for the present purpose, reads as follows : "8A, Determination of turnover. - (1) In determining the turnover of a dealer for the purposes of this Act, the following deductions shall be made from the aggregate of the sale prices, namely :- (a) the amount arrived at by applying the following formula :- rate of tax x aggregate of sale prices ------------------------------------------- 100 plus rate of tax. Provided that no deduction on the basis of the above formula shall be made if the amount by way of tax collected by a registered dealer in accordance with the provisions of this Act has been otherwise deducted from the aggregate of the sale prices .........................";

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