JUDGMENT

R. JAYASIMHA BABU, J.---
The question referred to us at the instance of the Revenue is as under:---"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in lacy in holding that the collection of deposits against sales tax four per cent. would not form part of the assessee's income and cancelling the order of the Commissioner of Income-tax under section 263"The assessee is a dealer in explosive detonators and safety fuses. It had collected four per cent. on the price of the goods as sales tax and paid the same to the Government. It collected a further four per cent. on the price of the goods as deposit against the sales tax and surcharge for the assessment years 1979-80 and 1980-81. The assessee contended" before the sales tax- authority that the explosive detonators, and safety fuses sold by, it were not chemicals and they were, therefore to be subjected to lower rate of sales tax. Nevertheless, it proceeded to collect from the customers the ent...