1. This writ petition has been filed under Article 226 of the Constitution of India for the issue of a writ of mandamus or any other appropriate writ or order, directing the respondent, the Deputy Commercial Tax Officer, Vaniyambadi, North Arcot District, to forbear from enforcing the demand made by his notice R. C. No. B1-3938/77 dated 4th July, 1977. The petitioner is a dealer of coconuts at Vaniyambadi. There was confusion from about the year 1969 on the question whether coconut is liable for sales tax and, if so, at what stage. Originally both the assessees and the commercial taxes department were under the impression that coconut is an oil-seed liable for assessment. Subsequently, some assessees put forward the contention that coconut is only a fruit, not liable for tax. The controversy has been settled by this Court holding that it is neither a fruit nor an oil-seed, but a commodity liable for multi-point sales tax like any other commodity liable for tax under the Act. By G. O. Ms. No. 2600, Revenue, dated 4th November, 1969, the Government directed that the assessments may be completed but the tax should remain uncollected pending disposal of the aforesaid tax cases. After the disposal of those tax cases, the Government issued a circular in Memorandum No. 133438/II(2)/73-7, Commercial Taxes and Religious Endowments Department, dated 26th October, 1976, saying that if the dealers had collected tax, they would be liable and not otherwise. The petitioner's case is that he had collected some amounts for the benefit of the association of coconut dealers, who were fighting the aforesaid tax cases on behalf of the dealers at 3 per cent of the turnover and not as tax and that the department has issued the demand notice on the ground that the tax at 3 per cent, the rate at which it is leviable as per the Act, had been collected in the guise of Association Fund and that the petitioner is, therefore, liable. The contention of the petitioner is that he had not collected sales tax as such and that the respondent is not entitled to ask for payment of the amount on the basis of the said circular dated 26th October, 1976. The respondent's case is that the petitioner had collected a sum of Rs. 5,552.30 as Association Fund representing 3 per cent of the turnover and that as per the Government memorandum dated 26th October, 1976, the respondent has passed the impugned notice of demand and the previous order dated 27th June, 1977.
2. We are concerned in this writ petition with the liability for sales tax for the years 1967-68 to 1969-70. The petitioner had collected Rs. 464.40, Rs. 395.10 and Rs. 5,552.30 during the years 1967-68, 1968-69 and 1969-70 respectively. In the notice dated 27th June, 1977, it is stated that the petitioner is liable to pay Rs. 464.40 and Rs. 395.10 for the years 1967-68 and 1968-69 under the Central Sales Tax Act and for 1969-70 the petitioner had collected moneys to the extent of Rs. 5,552.30 as Association Fund. In that notice it is stated that the petitioner is liable to pay Rs. 59.98 as tax under the Tamil Nadu General Sales Tax Act for the year 1969-70 and three sums of Rs. 2,207.58, Rs. 29,327.46 and Rs. 11,261.28 aggregating to Rs. 42,796.32 as tax under the Central Sales Tax Act for the years 1967-68, 1968-69 and 1969-70. But, in that notice, the liability has been restricted to Rs. 11,261.28, being the Central sales tax for the year 1969-70 and the Central sales tax of Rs. 464.40 and Rs. 395.10 for the years 1967-68 and 1968-69 aggregating to Rs. 12,120.78. In his reply, the petitioner stated that the amount collected during the year 1969-70 was for conducting an appeal pending before the High Court at that time and he has not collected any sales tax from any party and he is fully eligible for the waiver of tax for the period up to 17th March, 1970. But, in the impugned notice of demand, the respondent has stated that by reason of the Government Memorandum No. 110249/CT-II(2)63-l, Revenue, dated 28th November, 1969, the exemption granted by G. O. Ms. No. 2600, Revenue, dated 4th November, 1969, is not intended to apply to cases where a dealer in coconut had collected any amount equal to tax in the guise of some other charge and that the petitioner should, therefore, remit the balance of tax for 1969-70, viz., Rs. 11,261.28 and Rs. 859.50 by 15th July, 1977, failing which action will be taken as provided in law. It is not disputed - that the petitioner would be liable to pay the amount demanded by the impugned notice dated 4th July, 1977, if he had collected the same as sales tax in that year. Whereas, the contention of the petitioner is that the amount had been collected at 3 per cent of the turnover only as Association Fund for the conduct of the tax cases which were pending then in the High Court; the contention of the respondent is that tax had been collected in the guise of Association Fund. The respondent had not given any show cause notice or held any enquiry before coming to the conclusion that the amount has been collected as tax in the guise of Association Fund. In M. Gan-guli & Sons (P.) Ltd. v. Secretary to Government  37 S.T.C. 549, a dealer in automobiles and spare parts, sold a car on 2nd March, 1967, and issued a sale bill in which, after totalling the price of the vehicle, he added a certain sum under the head 'sales tax deposit'. On the same day, he obtained from the purchaser what was styled as a letter of indemnity under which the purchaser agreed that in case the Pondicherry Government demanded from the dealer at a later date sales tax on the transaction, the purchaser will pay the amount immediately on demand. On 24th May, 1968, the dealer, in fact, refunded the amount collected as sales tax deposit to the purchaser. The Government took the view that only in cases where the assessees had not in fact collected any tax in respect of a transaction of purchase or sale that the exemption under the notification dated 21st November, 1967, would apply and that in respect of the transaction of the dealer, there was in fact a collection of tax which took it out of the scope of the notification. It has been held by this Court that the amount received by the dealer from the purchaser was only a deposit and not a collection of tax and, therefore, the dealer is entitled to the exemption under the notification of the Pondicherry Government dated 21st November, 1967. This decision, in my opinion, would apply to the facts of the present case where the amount had been collected by the petitioner not as sales tax as such, but as Association Fund when tax cases were pending in this High Court, Since the amount had not been collected as sales tax, it is not open to the respondent to demand payment of the same, holding that the petitioner is not entitled to the waiver provided for in G. 0. Ms. No. 2600, Revenue, dated 4th November, 1969. The writ petition is accordingly allowed with costs. Advocate's fee Rs. 200.