1. The Sales Tax Officer assessed taxable turnover of the appellant for the year 1954-55 to be Rs. 1,73,987-15-0 and the learned Deputy Commissioner on appeal confirmed the taxable turnover to be Rs. 97,806-8-3 and ordered also to remit under Section 11(2) of the Hyderabad General Sales Tax Act, 1950, the sum of Rs. 1,773-1-3 said to have been collected as tax by the appellant on non-taxable commodities.
The appellant has preferred this appeal before us against the order of the Deputy Commissioner (Appellate) on the following grounds, namely that: (1) the Sales Tax Officer and the Deputy Commissioner, Appellate, erred in asking the appellant to remit under Section 11 (2) of the Hyderabad General Sales Tax Act the sum of Rs. 1,773-1-3 which he withheld out of the moneys payable to his non-resident principals under doubtful liability of the turnover to sales tax as a protective measure and entered in the suspense account. It is payable to the principals.
(2) the Sales Tax Officer and the Appellate Deputy Commissioner erred in holding the turnover of Rs. 58,273-2-6 relating to the goods exported outside the State, liable to be taxed.
As regards item (1) above, it is an admitted fact that wheat, jawar and pulses are purchased outside Hyderabad State and sold in Hyderabad State. Except pulses other commodities were taxable at the purchase point. The pulses were also made liable to levy of tax at the purchase point since 15th October, 1954. It appears from the account books of the appellants that the turnover of pulses during 1st October, 1954, to 14th October, 1954, was Rs. 5,482-7-6 and it was taxable at the sale point. The sum of Rs. 85-10-9 collected as tax on the said turnover of pulses during that period is therefore payable to the Government and the appellant's representative admitted the same. Now remains to determine whether the balance amount of Rs. 1,687-6-6 which the appellants retained with them out of the moneys payable to their non-resident principals under doubtful conception of liability of the turnover to sales tax, is also remittable to the Government under Section 11(2) of the Act.
The learned State Representative argued that any amount, whether legally or illegally collected as tax by the dealer, is payable to the Government under Section 11 (2) of the Act. He relied on the decision of their Lordships in Kunju Moideen Kunju v. State of Travancore-Cochin  5 S.T.C. 462. We do not, however, find ourselves in concurrence with this interpretation. This amount of Rs. 1,687-6-6 so retained cannot, in our opinion, be treated as tax inasmuch as tax is defined under Section 2(1) as tax leviable under the provisions of the Act and under Section 11(2) tax which is (lawfully) leviable and collected in excess by the dealer as such only is payable to the Government, but not the entire sum even that which is not lawfully leviable under the Act.
We are supported in our view by the judgments of their Lordships of the Madras High Court in Tata Iron & Steel Co. v. State of Madras  5 S.T.C. 382, of the Mysore High Court in Minerva Mills and Anr. v. State of Mysore  7 S.T.C. 148 and of the Hyderabad High Court in Cement Marketing Co. of India Ltd. v. Sales Tax Officer, VIII Circle Secunderabad Unreported (File 27/5/55). The learned State Representative stressed much on the following words of Section 11(2) "any amount by way of tax under this Act". The real meaning of these words can be well understood if they are read with sections 4 and 10 of the Act. Under Section 10, a dealer whose turnover for the assessing year exceeds Rs. 5,000 should register himself as a dealer and he is empowered under Section 11(1) to collect amounts by way of tax under the Act. In case his turnover does not exceed the exempted limit of Rs. 7,500 he cannot be taxed under Section 4(1) of the Act, but he is nevertheless liable to remit the amounts so collected to the Government under Section 11(2) of the Act. The object of Section 11(2) of the Act is to hold a dealer liable to pay over to the Government all amounts collected by way of tax lawfully even though his turnover being less than Rs. 7,500 cannot be taxed for any year under Section 4 of the Act.
In our opinion, the sum so withheld by the appellant is not remittable to Government, but is refundable to the appellant's non-resident principals as it is not a tax leviable under this Act. The order of the learned Deputy Commissioner is not correct and to this extent the appeal is allowed.
Regarding item (2) of the argument of the appellant, it is an admitted fact that the appellant purchased certain commodities which are taxable at the purchase point under Rule 5(2) of the Hyderabad General Sales Tax Rules, 1950, but the appellant's representative contended that levying tax on such turnover is illegal as the commodities so purchased by him have not been sold in the State but have been exported to outside dealers.
According to Dalton "a tax on sales or on turnover is only a tax on the commodities sold or turned over-it makes no essential difference whether the tax is legally imposed on the buyer or seller." In Sri Radhakrishna Groundnut Oil Mills v. State of Madras  5 S T.C.357, their Lordships of the Madras High Court have held that under Rule 4(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, the levy of tax at purchase point on dealings in groundnuts is lawful.
It matters little whether an assessee sold the groundnuts he had purchased or converted that groundnut into oil, so long as the condition required by that rule was satisfied namely that the groundnut was purchased by the assessee in the course of his business. A dealer is defined in Section 2(e) of the Act as "any person who is engaged in the business of buying or selling goods in the Hyderabad State". If the contention of the appellant's representative is to be accepted the definition of the dealer should be something like this. A " 'dealer' means a person who carries on business of buying and selling the very goods he bought." Again the word "turnover" is defined by Section 2(m) of the Act as "the aggregate amount for which goods are either bought by or sold by a dealer", and under Rule 5(2) of the Hyderabad General Sales Tax Rules, 1950, the turnover should be calculated, in the case of groundnuts, on the amount at which they were purchased by the dealer. As this provision is in accordance with the right vested in the State under Item 54 of List II (State List) of the Seventh Schedule of the Constitution of India, it is lawful for it to impose tax on purchase turnover of a dealer whether or not there is a subsequent sale by him of the same goods. Apparently the interpretation given to the provisions of the Act by the learned authorised representative of the appellant is, therefore, not correct.
He stressed much on the words "in respect of every point in a series of sales" in Section 5. This Section 5 of the Act is not a charging section but by laying down that in a series of sales the tax is leviable at every point of sale except as provided otherwise in Section 6 of the Act, only reiterates the intention already declared in Sections 3(1) and 4(1). The real charging section of the Act is Section 4, according to which "every dealer whose turnover is not less than Rs. 7,500...shall, save as otherwise provided in this Act, pay a tax...on so much of the turnover for the year as is attributable to the transaction in goods other than exempted goods". That is to say, the tax is leviable on every dealer or at every point of sale (or purchase) other than the cases falling under Section 6 which have been specifically excepted. Therefore even if Section 5(1) is deleted and the two provisos thereof are read with Section 4 the position would remain the same and it would still mean that tax is leviable "at every point in a series of sales by successive dealers" inasmuch as even under Section 4 every dealer shall pay tax on his turnover. Further the appellant's representative contended that there should be more points of sale than one by successive dealers, if tax is to be levied under the Act. This contention is again erroneous because the intention of the Legislature in incorporating Section 5(1) cannot be anything other than to clarify the position of the provisions of Section 4 as explained by us above. "Series of sales" does not mean to be that a tax can be levied only when there are more than one sale. Tax can be levied under the Act even when there is only one sale so long as such sale is by a dealer or to a dealer. If the definition of sale under Section 2(k) is substituted in Section 5(1) it would then read as "the tax is leviable in respect of every point in a series of tranfers of property in goods by one person to another in the course of trade or business for cash or for deferred payment or for other valuable consideration." That is to say, the Government can levy tax on dealers so long as there is a transfer of property in goods by one person to another in the course of trade or business involved in such transactions. The meaning imported by the learned authorised representative of the appellant that under Section 5(1) tax is leviable only on every sale in a series to successive dealers is therefore not tenable.
The only prohibition in this regard is under the two provisos of Section 5(1) of the Act, namely, that only one of them, either the buyer or the seller, can be taxed on the same transaction and who, is a matter left to be determined by the State, as stated above. In the case under consideration tax has been preferred to be levied on the purchase turnover of a dealer as provided in Sub-rule (2) of Rule 5 of the Hyderabad General Sales Tax Rules, 1950. Therefore the contention of the learned authorised representative of the appellant that Section 5(1) of the Act does not authorise such imposition of tax on purchase turnover of groundnut until the same commodity bought by the dealer is subsequently sold is, therefore, not valid, nor is it essential that there should be a series of sales to attract liability to tax under the Act.
Accordingly the appeal is allowed in part. The appellants are liable to pay tax on their purchase turnovers as already assessed. He is however not liable to remit the sum of Rs. 1,687-6-6 to the Government as ordered by the learned Deputy Commissioner, Appellate. To this extent the order under appeal is set aside.