2007 (1) TMI 532 - HC - VAT and Sales Tax

Court upholds inclusion of freight charges in taxable turnover for alcohol dealer despite separate invoicing.

The court upheld the decision to include freight charges of Rs. 19,91,643 in the taxable turnover of the petitioner, a dealer in alcohol and other ... - Issues:1. Whether freight charges of Rs. 19,91,643 are part of the sale price and taxable turnover.Analysis:The case involves a dispute over whether freight charges of Rs. 19,91,643 should be included in the taxable turnover of the petitioner, a dealer in alcohol and other products. The assessing officer deducted the freight charges from the sale prices, arguing that the freight was collected separately and represented pre-sale charges. The assessing officer also noted that the goods were delivered at the buyers' places, the freight was included in the price quoted, and the 'C' form declarations submitted by the parties included the freight charges. The appellate authorities affirmed the decision to tax the freight charges, leading to the petitioner seeking relief through a writ petition.The petitioner contended that for a subsequent assessment year, the same assessing officer had accepted that freight charges collected separately should not be part of the sale price. However, for the current assessment year, a different view was taken. The petitioner argued that the freight charges were separately shown in the invoices and should not be considered part of the sale price for tax purposes. The court considered the evidence, including the 'C' form declarations and the delivery arrangements, where the risk in the goods remained with the petitioner until delivery at the buyer's place. Additionally, the petitioner had taken transit insurance in their name for the goods. Based on these factors and the absence of material evidence to prove otherwise, the court upheld the decision to include the freight charges in the taxable turnover. The writ petition was dismissed, with no costs awarded to either party.