CHANDRA REDDY,J. - (1.)The assessee is a manufacturer of gunnies and twine. The assessment year is 1950-51. This revision case relates to the amount collected by the assessee by way of sales tax from the purchasers under Rule 5, sub-rule (7) of the Turnover and Assessment Rules. In the year of assessment, the assessee submitted a statement of gross-turnover of Rs. 40,82,555-4-3 claiming a deduction in respect of some sums with which we are not concerned. The assessing authority added to the turnover, a sum of Rs. 58,699-3-9 representing the taxes collected by the respondent on the goods sold by him. An appeal was preferred by the assessee against the order including the sales tax collected by him in his turnover for the year. But this appeal was rejected. A further appeal to the Sales Tax Appellate Tribunal resulted in the exclusion of this sum from his turnover. It is this order of the Appellate Tribunal that is impugned by the State Government in this Revision case.
(2.)It is urged in support of this case that the assessee is not entitled to deduct anything from the gross-turnover except those items that are specifically mentioned under Rule 5(1)(a) to (k) and that the sales tax collected by the assessee is not included in them. We do think we can give effect to this contention. The mere fact that this is one of the items mentioned in Rule 5(1) of the Turnover and Assessment Rules does enable the assessing authority to levy a tax on the amounts collected by the assessee from the purchasers by way of payable on sales. The purpose of Rule 5 (1) is to determine the net turnover and in assessing it certain amounts are deducted which are mentioned in clauses (a) to (k).
(3.)The non-mention of this particular head in Rule 5(1) will be significant if it could be treated as a part of the turnover. In our opinion, it cannot come within the ambit of the definition 'turnover'. Under Section 2(1) of the Act 'turnover' means the aggregate amount for which the goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person, of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest, whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. It is thus seen that, it is only the amount collected by way of the price of the goods sold that would come within the scope of this sub-section. The sales tax is a part of the price or consideration paid by the purchaser. In fact the tax is determined only on the price paid by the purchaser for the articles purchased. The question of tax comes up only after the bargain is struck between the parties. As such, it cannot be a part of the purchase price. Therefore, tax on sale is outside the consideration paid by the consumer for the goods purchased by him
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