Judgment :- The Honourable Chief Justice: This is a reference under Section 256(1) of the Income Tax Act, 1961 at the instance of the Department in which the following question has been referred to us for our opinion: - “ Whether on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in not holding that the amounts of sales tax on printing receipts collected by the assessee formed part of the assessee’s trading receipts in view of the ratio of the Supreme Court’s decisions in the case of Chowringhee Sales Bureau P. Ltd (87 ITR 542), Jonnalla Narashimarao and Co. and others (200 ITR 588) and Sinchlair Murray Co. P. Ltd (97 ITR 615)” 2. Heard the learned counsel for the parties. 3. The assessee is a partnership firm. For the assessment year 1987-88, the Assessing Officer had made an addition of Rs.1,49,620/- on the ground that the assessee was found to have collected sales-tax contingency deposit of Rs.1,49,620/- which had not been remitted to the Government account. The assessee contended that the Tamil Nadu Government had brought in an amendment to the Sales-Tax Act to the effect that all contract receipts are liable for levy of sales tax. As the assessee had received charges on printing and processing on job work basis, the Sales Tax Department had interpreted that the receipts are in the nature of contract receipts and proposed to levy sales tax. The assessee had objected to this levy of sales tax in a writ petition filed in this Court and obtained a stay order which was subsequently vacated. It is submitted that the said petition is still pending. 4. On appeal by the assessee, the Commissioner of Income-Tax (Appeals) by order dated 23.3.1990 decided the issue in favour of the assessee. On further appeal by the revenue, the Appellate Tribunal by order dated 22.4.97 following the decisions in the case of M/s. Sundaravel Industries in I.T.A.No.2406/Mds/89 and M/s. Sakthi Finance Limited in I.T.A.No.3206/Mds/90 held that the receipt should be treated as a deposit in certain contingencies and such receipts could not assume the character of income. The Appellate Tribunal upheld the order of Commissioner (Appeals). 5. The Appellate Tribunal upheld the order of Commissioner (Appeals). 5. The question involved in this case is covered against the assessee in an unreported decision of this Court in The Commissioner of Income Tax, Madurai v. M/s. Sri Murugan Offset Printers, Sivakasi, T.C. (Appeal) No.42 of 2000 dated 24.3.2003, wherein this Court observed: - “ This Court has considered an identical issue in the case of C.I.T v. Southern Explosives Co. (2000 (Vol.242) I.T.R. 107) and held that the true character of the receipt must be judged with reference to the reasons for the collection and the liability for meeting which the collection was made. When the liability is a statutory liability, which the assessee was required to meet and for meeting which it was by the statute or authorities permitted to collect the amount required from its customers, the true character of the collection is a trading receipt. By calling a portion of the amount as deposit, it cannot be said that the assessee had constituted itself a trustee and therefore, the amounts received were not required to be regarded as a part of trading receipt. The abovesaid decision of this Court will squarely cover the facts of the present case. Hence the appeal, at the instance of the Revenue, has to be allowed. The appeal is allowed, setting aside the order of the Tribunal.” 6. Following the above said decision, and also the decision of this Court in C.I.T v. Southern Explosives Co.(supra), the question referred to us is answered in the affirmative i.e., in favour of the department and against the assessee.