By C. B. Thakar
Advocate
G. G. Goyal
Janak Vaghani
Chartered Accountants
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Central Sales Tax- Sales Price-Excise Duty Paid on Past Transaction – In absence of Evidence of Its Collection-Does Not Form Part of Sale Price- Section 2(h) of The Central Sales Tax Act, 1956.
Facts
The assesse manufacturer of plastic components did not charge excise duty on certain transaction of sales on a bonafide belief that it is not payable. However, later on paid excise duty after taking licence under Central Excise provisions but did not collected the same from the buyers. The department based on proceedings from the excise authority, levied tax on excise duty paid by the dealer for past transactions although not collected from buyers. On appeal tribunal allowed appeal against which the department filed revision petition before the Madras High Court.
Held
As per definition of sale price contained in section 2(h) of the CST Act, what is charged as consideration alone could be considered as turnover of sales. Admittedly, the fact is, on the date of sale, the petitioner had collected as sale consideration and did not collect excise duty paid by it from the buyers and no evidence was available subsequent to payment of excise duty whether the portion of such payment had been passed over to the customer as a part of consideration. Therefore, the excise duty paid by the dealer and not collected from the customer cannot form part of sales turnover for levy of tax. Accordingly, the High Court dismissed the revision petition filed by the department and confirmed the order of the Tribunal.
