1. The question that arises for consideration in this case is as to whether the collections to the extent of Rs. 5,817.41 made by the assessee as mahimai at the rate of half percent, of the net sale price from his purchasers will form part of his taxable turnover.
2. It was contended by the assessee before the authorities below that the said mahimai collection has been made only from his selling agents, that it is a contribution by the purchasers only for renovation of a Vinayagar temple, and that the said sums collected as mahimai were not part of the sale proceeds. But his contention was overruled on the ground that the amounts collected were part of the sale consideration and that, therefore, they formed part of the taxable turnover, as there is no provision either in the Act or in the Rules giving a deduction for that amount. It is not in dispute that the amounts collected as mahimai formed part of the sale invoices issued by the assessee, though they were shown separately.
3. According to the assessee, the definition of 'turnover' in Section 2(r) of the Tamil Nadu General Sales Tax Act will not include the collections of this kind, as this was not the subject-matter of a bargain between the parties and it is a voluntary payment made by the purchasers for certain charitable and religious object. The learned counsel for the assessee, in support of the said contention, referred to some of the decisions dealing with the scope of Section 2(r).
4. In Radhakrishna Rao v. Province of Madras,  3 S.T.C. 121, a Full Bench of this Court while dealing with the question as to whether certain commission agents licensed under Section 8 of the Madras General Sales Tax Act, 1939, had violated the conditions of the licence granted to them in collecting a sum called rusum in pursuance of a trade usage and whether the said rusum formed part of the agreed commission contemplated by Section 8, held that by collecting the amounts called rusum from the buyers with the consent of the sellers, according to the trade usage, they cannot be said to have violated the conditions of Section 8. That decision does not throw much light as to the scope of the term 'turnover' as defined in Section 2(r). In Nemkumar Kesrimal v. Commissioner of Sales Tax, Madhya Pradesh  6 S.T.C. 222, a Division Bench of the Nagpur High Court, while considering the definition of 'sale price' in Section 2(g) of the Central Provinces and Berar Sales Tax Act, held that a sum charged as dharmada will not form part of the price proper and their reason can be stated in their own words at page 228:
If it were price proper, it would have been included in the price and not separately charged. There is no material on record to hold that the seller could refuse to perform the agreement if dharmada was not paid. It appears to be a willing charge paid by the buyer in addition to the valuable consideration for the transfer of property. We are, therefore, inclined to hold on the material on record that it cannot be included in the sale price.
5. In Srinivasa Timber Depot v. Deputy Commercial Tax Officer  23 S.T.C. 158 the scope of explanation (2) to Section 2(r) of the Madras General Sales Tax Act, 1959, was considered and it was pointed out therein that what could be legitimately brought to tax under the Act is the aggregate sums of consideration for the transfer of property in the goods. In Spencer and Co. v. Joint Commercial Tax Officer  24 S.T.C. 161, the question arose as to whether the amount of sales tax collected under Section 21-A of the Madras Prohibition Act, 1937, and the gallonage fee paid under Clause (XI) of Rule 22 of the Madras Liquor (Licence and Permit) Rules, 1960, formed part of the price of the goods sold and can be validly included in the assessable turnover of a dealer under the Madras General Sales Tax Act, 1959. It was held that the sales tax collected under Section 21-A of the Prohibition Act cannot be included in the taxable turnover but the gallonage fee will form part of the assessable turnover. The reason for holding that the sates tax collected under Section 21-A of the Prohibition Act cannot be included in the assessable turnover is that it is not open to the State to include the sales tax collected by the seller under a statutory obligation in the assessable turnover of the said dealer, while assessing him under the Sales Tax Act. In our view, the above decisions do not cover the point that arises in this case.
6. The collection of mahimai in this case is not an amount which the seller is statutorily authorised to collect. That is an amount which he has demanded and collected from the purchasers on the occasion of the sale and he has included it in the sale bills by showing it separately. The definition of 'turnover' in Section 2(r) refers to the aggregate amount for which the goods are bought or sold by a dealer and 'taxable turnover' has been defined in Section 2(p) as the turnover on which the dealer shall be liable to pay tax after making such deductions from his total turnover and in such manner as may be prescribed. If the mahimai collections made formed part of the aggregate amount for which the goods are sold by the assessee it will come under the definition of 'turnover' and unless there is any specific statutory deduction available either under the Act or under the Rules it will fall within the definition of 'taxable turnover'. In George Oakes (Private) Limited v. State of Madras  12 S.T.C. 476 the Supreme Court has observed :
Under the definition of turnover the aggregate amount for which goods are bought or sold is taxable. This aggregate amount includes the tax as part of the price paid by the buyer. The amount goes into the common till of the dealer till he pays the tax. It is money which he keeps using for his business till he pays it over to Government. Indeed, he may turn it over again and again till he finally hands it to Government. There is thus nothing anomalous in the law treating it as part of the amount on which tax must be paid by him. This conception of a turnover is not new. It is found in England and America and there is no reason to think that when the Legislatures in India defined 'turnover' to include tax also, they were striking out into something quite unknown and unheard of before.
7. Though the above decision was rendered in the context of the legislative competence of the State Legislature to enact the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954, the observations in that case have been taken as explaining the true scope of the word 'turnover' in the Madras General Sales Tax Act, 1939, in a later decision in State of Kerala v. Ramaswami Iyer and Sons [1966) 18 S.T.C. 1. In Delhi Cloth and General Mills Co. Limited v. Commissioner of Sales Tax  28 S.T.C. 331, the Supreme Court while considering the question whether the sales tax collected by a dealer came within the definition of 'sale price' in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958, stated thus :
There is no provision in the Act from which it can be gathered that the Act imposes any liability on the purchaser to pay the tax imposed on the dealer. If the dealer passes on his tax burden to his purchasers he can only do it by adding the tax in question to the price of the goods sold. In that event the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchaser for the goods purchased by him. If that be so, the tax collected by the dealer from his purchasers becomes a part of the sale price fixed, as defined in Section 2(o).
8. In that case, the following passage of Lawrence, J., in Paprika Ltd. and Anr. v. Board of Trade  1 All E.R. 372. has been quoted with approval:
Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to be the price which the buyer has to pay even if the price is expressed as X plus purchase tax.
9. The following observation of Goddard, L.J., in Love v. Norman Wright (Builders) Ltd.,  1 All E.R. 618 has also been referred to with approval :
Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay. The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale there is only one consideration though made up of cost plus profit plus tax. So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if he desires to pass it on to the buyer. If the buyer agrees to the price, it is not for him to consider how it is made up or whether the seller has included tax or not.
10. A Division Bench of the Andhra High Court in Poosarla Sambamurthi v. State of Andhra  7 S.T.C. 652, while construing the definition of 'turnover' in Section 2(i) of the Madras General Sales Tax Act, 1939, as amended by the Andhra Amending Act of 1954 held that as per the amended definition, the turnover included all sums charged by the dealer whatever be the description, name or object thereof and, therefore, the sums collected by the dealer such as dharmam, valtar and katha cooly would clearly form part of the turnover. In Government of Andhra v. East India Commercial Co. Ltd.  8 S.T.C. 114, the same extended definition of turnover was considered by a Full Bench of the Andhra Pradesh High Court. Dealing with the effect of the amendment it was observed :
The ultimate economic incidence of the sales tax is on the consumer or the last purchaser and whatever he pays for the goods is paid only as price, that is to say, as consideration for the purchase. The statutory liability, however, for payment of sales tax is laid on the dealer on his total 'turnover' whether or not he realises the tax from the purchasers. Generally speaking, the price charged by the dealer would be inclusive of sales tax, for, it is to his interest to pass the burden of the tax to the purchaser. So far as the dealer is concerned, the payment of a sum covering the tax made by a purchaser on the occasion of sale, is really part of the price which the purchaser pays for the goods.
11. Applying the principles laid down in the above decisions to the facts of this case, we are of the view that the assessee in this case who has added half a per cent, of the actual sale price in his invoices and collected the same from the purchasers, who are under no legal obligation to pay the same, should be treated as part of the consideration for which the goods have been sold by him. It is an amount collected on the occasion of sale, in the sale bills. We are not inclined to accept the assessee's contention that the payments have been made voluntarily by the purchasers, for we have not been shown any instance in which the goods have been sold without charging the mahimai. We will have to, therefore, assume that the assessee would not have parted with the goods unless the purchasers agreed to pay the mahimai also. It has, therefore, to be held that the amount of mahimai collected by the assessee will form part of the turnover.
12. The result is, the tax revision case is dismissed, but in the circumstances, no costs.