Satyanarayana Rao, J.-

This is a batch of petitions under the Sales Tax Act, which are given the appellation “Tax on Tax” cases, which expression is suggestive of the point involved in the cases.

The question raised is, whether the amounts collected by the registered dealer from the consumer by way of tax and paid over to the Government should be included in the turnover of the registered dealer as part of the sale price of the goods sold. The facts in C.R.P. No.1413 of 1952 may be taken as typical of the facts in the other cases.

The assessee in the case is one Krishnaswamy Mudaliar and Sons dealers in timber and piece-goods at Vellore. His turnover was assessed at Rs.27,38,901-1-10 for the assessment year 1948-49. The assessee objected to the inclusion of a sum of Rs.39, 759-13-1 in the turnover of his business as it represents the amount of tax which he collected from the consumers and paid over to Government. The decision of the department was against the assessee; he succeeded in convincing the Tribunal that his claim was well-founded. The Government have filed these petitions against the orders of the Tribunal.

Under the Madras General Sales Tax Act, a registered dealer is empowered to collect any amount by way of tax leviable under this Act from the consumer, and he has to pay all the amounts so collected by him, if they are in excess of the tax, if any, paid by him. for the period during which the collections were made, to the Government: if he defaults in paying such amount, the amount could be recovered by the Government from the registered dealer as if they were arrears of land revenue (vide section 8-B), of the Act. Under section 15 of the Act, clause (1), a person, who collects any amount by way of tax under the Act in contravention of the provisions of section 8-B sub-section (1) or fails to pay the amount specified in section 8-B, sub-section (2) within the prescribed time, is liable for conviction by a magistrate, and the magistrate has to specify in the order the tax which the person convicted has failed or evaded to pay or has wrongfully collected, which amount is recoverable from him as fine. In view of the above penal provisions contained in section 15 of the Act, it follows that a dealer who has not registered himself under the provisions of the Act is not entitled to collect any amount by way of tax from the consumer under the colour of the Act, while a registered dealer is entitled to pass on the tax levied on him to the consumer as he is entitled to collect it from the consumer. If, however, the unregistered dealer, without purporting to act under colour of the Act, makes it part of his bargain with the consumer that he should pay not only the sale price agreed upon between the parties but also in addition to it the tax which the dealer could be called upon to pay in respect of such transaction, the only authority in that event for the unregistered dealer to add the tax to the price is that he thereby makes it part of the sale price for which the goods were agreed to be sold. In such event, undoubtedly, it would be open to the purchaser, that is the consumer, either to accept the bargain in the manner stipulated by the unregistered dealer, or to refuse to accept the bargain. In cases in which an unregistered dealer adds to the sale price, the amount equal to the tax which he would be liable to pay to the Government it would undoubtedly be part of the sale price as it is part of the bargain. The question in these cases is “Does the same hold good in the case of a registered dealer?” Unfortunately, under the Act, the power and authority of the registered dealer to collect the tax from the consumer is only implied in section 8-B, though it is made explicit in the Turnover and Assessment Rules, rule 5-A(7). It is a somewhat curious piece of drafting that the positive authority to collect the tax should have been relegated to the Rules, while the prohibition is made part of the Act itself. Under section 8-B(1),

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