State of Andhra Pradesh vs G.V. Raman Laxman

Syed Shah Mohammed Quadri, J.—The question that arises for consideration in this revision is whether the formula incorporated in section 8-A of the Central Sales Tax Act, 1996 will apply to the facts of this case.

This revision is filed by the State against the order of the Sales Tax Appellate Tribunal in T.A. No. 735 of 1985, dated March 17, 1986. The Tribunal took the view that only when Central sales tax was not separately charged and collected by was embedded in the sale price, the formula was attracted. This view is challenged before us.

Section 8-A of the Central Sales Tax Act, 1956 deals with determination of turnover. It reads as follows :

"8-A. 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 sale prices.

Explanation. - Where the turnover of a dealer is taxable at different rates, the aforesaid formula shall be applied separately in respect of each part of the turnover liable to a different rate of tax."

For the purpose of determining the turnover of a dealer under the Central Sales Tax Act some deductions are allowed. One of the deductions, relates to the tax component, which is arrived at by applying the formula given in clause (a). The proviso to sub-section (1) enjoins that on the basis of this formula, no deduction should be allowed if the amount by way of tax was collected by the registered dealer, in accordance with the provisions of the Act, and has been otherwise deducted from the aggregate of sale price. Thus, it is clear that where the sale price was inclusive of the tax and Central sales tax was not separately charged and collected, the formula is attracted. But where the Central sales tax was separately charged and collected, there is no scope to invoke the formula mentioned in section 8-A of the Central Sales Tax Act, 1956. This principle was also laid down by the Division Bench in Rallis India Limited Vs. The State of Andhra Pradesh, .

For the above reasons we confirm the order of the Tribunal and dismiss this revision. No costs.

Petition dismissed.