Judgment

GUPTA, J.:- These twelve appeals arise out of a common Judgment of the Madras High Court disposing of the writ petitions filed by the respondents in which they challenged certain orders of the assessing authority under the Madras General Sales Tax Act, 1959 proposing to redetermine the taxable turnover of the respondents by including the sale price of foreign liquor which, it was alleged, had escaped assessment. The High Court directed the sales tax authorities not to include in the assessable turnover the tax paid by the respondents under Settion 21-A of the Madras Prohibition Act, 1937. In these appeals, brought on certificate of fitness, the correctness of the High Court s decision is questioned by the sales tax authorities. The appeals have three different assessees as respondents and relate to different assessment years concerning each assessee, ranging from 1959-60 to 196465.

2. The assessees are dealers in foreign liquor, among other goods. They have been assessed to sales tax as dealers on sales or purchases of other goods under Section 3 (1) of the Madras General Sales Tax Act, 1959. Sec. 3 (1) is the charging section providing generally that a dealer whose total turnover for a year is not less than the specified amount, shall pay a tax for each year at the specified rate. Turnover is defined in sec. 2 (r) of the Act. The relevant part of the definition is as follows:

"Turnover means the aggregate amount for which goods are bought or sold or supplied or distributed, by a dealer, either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration. . . ...

" Total turnover is defined in Sec. 2 (q) of the Act as "the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax". The question is whether the sales tax collected by these assessees under Section 21-A of the Madras Prohibition Act,1937 can be treated as part of their total turnover. Section 21-A, so far as it is relevant for the present purpose, is in these terms:

" Every person or institution which sells foreign liquor

(a) x x x x

(b) x x x x

shall collect from the purchaser and pay over to the Government at such intervals and in such manner as may be prescribed, a sales tax calculated at the rate of eight annas in the rupee, or at such other rate as may be notified by the Government from time to time, on the price of the liquor so sold."

Counsel for the appellants contended relying on several decisions of this court to which we shall presently refer, that the amounts collected by the assessees by way of sales tax from the purchasers were part of their total turnover and as such liable to be taxed under Section 3 (1) of the Madras General Sales Tax Act 1959. In M/s. George Dakes (P) Ltd. v. State of Madras, (1962) 2 MR 570 this Court considered the question whether inclusion of the amounts collected by the appellants in that case as sales tax under the Madras General Sales Tax Act, 1939 was valid. The expression turnover in the 1939 Act meant, as it does in the 1959 Act, aggregate amount for which goods are bought or sold, whether for cash or for deferred payment or other valuable consideration. This Court observed:

"......when a sale attracts purchase tax and the tax is passed on to the consumer, what the buyer has to pay for the goods includes the tax as well and the aggregate amount so paid would fall within the definition of turnover..... so far as the purchaser is concerned, he pays for the goods what the seller demands, viz, price even though it may include tax. That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turnover."

A similar view was taken by this Court in State of Kerala v. Ramaswamy Iyer & Sons, (1966) 3 SCR 5