1. All these three petitions are filed by the same petitioner. The petitioner is a dealer in cotton, and was having extensive trade in cotton of inter-State character. In respect of the periods ending Deepavali 1965, Deepavali 1966 and Deepavali 1967, he was assessed to tax under the Central Sales Tax Act. While doing so the turnover in respect of cotton was exempted by the sales tax authorities from payment of sales tax having regard to section 9 of the Central Sales Tax Act as it stood then and in view of the decision of the Supreme Court in Yaddalam Laksminarasimhiah Setty and Sons : 2SCR129 . Later on the Central Sales Tax Act was amended by the Central Sales Tax (Amendment) Act, 1969, with retrospective effect whereby the turnover in respect of inter-State sales in cotton became subject to sales tax. But in the same amending Act it was provided by section 10 that in respect of the turnover relating to the periods between 10th November, 1964, to 9th June, 1969, no tax shall be payable under the amending Act notwithstanding the fact that the amending provision had been given retrospective effect, provided it was established by the dealer that he had not collected Central sales tax from the purchasers in respect of the said turnover. After the amending Act was passed, the assessing authority commenced rectification proceedings in respect of the three assessment years ending Deepavali 1965 to 1967 and ultimately held that the petitioner was liable to pay Central sales tax in respect of its turnover in cotton. Aggrieved by the said orders the petitioner has filed the above three petitions.
2. Sri K. Srinivasan, the learned counsel for the petitioner, contended, relying upon the decision of the Division Bench in Spencer & Co. Ltd. v. State of Mysore ( 26 S.T.C. 283), that the petitioner had established that it had not collected Central sales tax from the dealers. A similar argument addressed before the assessing authority was rejected by him on the ground that the bills produced by the petitioner before him stated that the money received by him was inclusive of Central sales tax. Sri Srinivasan, the learned counsel for the petitioner, relied upon the following observation made in Spencer & Co.'s case ( 26 S.T.C. 283) :
'The clause 'all amounts collected by way of tax under the Act by a dealer' in rule 6(4)(h) and section 18, in our opinion, means all amounts collected in the character of or as being tax, under the Act. The evidence concerning the transaction must show that the buyer had agreed to pay sales tax in addition to the price and the seller's account books should disclose such amounts separately. Where there is absence of such evidence, it cannot be said that amounts were collected by the dealer in the character of or as being tax. Therefore, in our judgment, a dealer can be said to have collected the amounts by way of tax under the Act where, from the facts and circumstances, it can be inferred that the seller intended to pass on the tax and the buyer had agreed to pay the sales tax in addition to the price and that in the accounts of the dealer he has shown such amounts separately.'
3. It is clear from the above decision that in order to establish that the petitioner had collected sales tax, two facts must be established : (1) that the buyer had agreed to pay the sales tax in addition to the price; and (2) that the seller's account books should disclose the said amount separately. Even granting for purposes of argument that the writing in the bills of the seller showed that the amount included sales tax payable by the dealer also, the fact that there was no evidence showing that the said amounts collected as being tax had been shown separately in the account books of the seller, would still bring the turnover in question within the protection of section 10(1) of the amending Act, 1969. In this case there is no evidence to show that the dealer had shown the amounts which he had collected by way of tax separately in his account books. Hence, in view of the observation made in Spencer & Co. Ltd. case ( 26 S.T.C. 283), these petitions should be allowed. The orders passed by the assessing authority demanding payment of Central sales tax in respect of the turnover of inter-State sales in cotton for the years ending Deepavali 1965, Deepavali 1966 and Deepavali 1967 are quashed. No costs.
4. Petitions allowed.