V V DYAVAKKALAVAR AND CO Vs. COMMERCIAL TAX OFFICER HAVERI

JUDGEMENT

(1.) This Writ Petition, preferred under Art.226 of the Constitution of India by an assessee under the Mysore Sales Tax Act, 1957, hereinafter called the Act, is directed against the order of penalty made by the Commercial Tax Officer, Haveri (respondent 1) under S.18A of the Act, by which he imposed a penalty of Rs.4,915.

(2.) The conetntion of the petitioner is that on the facts found by the first respondent there has been no contravention of sub-sees. (1) or (2) of S.18 of the Act and consequently the levy of penalty is illegal. In order to appreciate the contention, the material facts which are not in dispute may be briefly stated: The petitioner is a Commission Agent dealing in chillies besides other goods. The petitioner sells the chillies suppled by his principals, who are agriculturists. Though the sales by a Commission Agent of agricultural produce supplied by agriculturists for sale are not exigible to tax under the Act, the petitioner was assessed to sales tax on the turnover of chillies sold during the year 1966-67. That Order of assessment was taken up by the petitioner in appeal to the Deputy Commissioner of Commercial Taxes, who is the first appellate authority. The said appeal was pending during the period 13-10-1967 to 1-10-1968. During the said period the purchasers deposited a sum of Rs.4,912-06 with the petitioner to be appropriated towards sales tax in the event of the sale being ultimately held to be exigible to tax. The appeal preferred by the petitioner for the year 1966-67 was allowed by the Deputy Commissioner of Commercial Taxes. Following the said Order, when the first respondent made the assessment Order for the period 13-10- 1967 to 1-10-68, the turnover of chillies was exempted from sales tax. The assessment Order dated 26-6-1969 stated that the petitioner had collected a sum of Rs.4,912-06 by way of deposit relating to commission agency sales of chillies and separate action was being taken under S.18A so far as the collection was concerned. The said Order was followed by a notice dated 27-6-1969. That notice stated that the petitioner during the period from 13-10-1967 to 1-10-1968 had collected a sum of Rs. 4,912.05 as deposit on the sale of chillies effected on behalf of the grower principals. The petitioner was asked to show cause why penalty should not be levied under S.18A of the Act since the said amount represents collection by way of tax or purporting to be by way of tax. In reply to the said notice, the petitioner stated the facts, already set out, regarding the non-exigibility to tax of the sales turnover and also that there is no contravention of S.18. The first respondent overruling the objection of the petitioner passed an Order on 1-9-1969 imposing a penalty of Rs.4,915. The said Order state that the petitioner during the relevant period had collected the sum aforesaid as deposit on the sale of chillies effected on behalf of the grower principals. But, such collection in the opinion of the first respondent amounts to collection of an amount by way of tax or purporting to be by way of tax.

(3.) In V.B.Patil v. Commercial Tax Officer, Haveri, 25 STC 448 = (1970) 1 Mys.L.J. 447, we have held that if a transaction is not exigible to tax or when a dealer is not liable to pay tax on any transaction then the collection made by him would fall outside the scope of S.18(1) and such collection does not amount to a contravention of sub-sec.(1) of S.18 as the Act stood prior to its amendment on 1-4-1967. S.18(1) as it then stood read thus: