JOINT COMMERCIAL OFFICER, DIVISION II,MADRAS-2 ETC. vs SPENCER & CO. ETC. ETC.

The Supreme Court held that under Section 21-A of the Madras Prohibition Act, 1937, the sales tax collected by dealers of foreign liquor is a tax on the purchaser, not the seller, and thus cannot be included in the seller's taxable turnover under Section 3(1) of the Madras General Sales Tax Act, 1959. The Court dismissed the appeals, affirming the High Court's decision that the amounts collected under statutory obligation do not constitute part of the dealer's turnover. The judgment clarified the distinction between the seller's price and the tax collected on behalf of the government.