Self-incurred transport expense cannot be added to goods value where no freight is paid to another person.

The value of goods under Section 2(h) of the U.P. Tax on Entry of Goods into Local Areas Act, 2007 includes transport or freight charges only when they are amounts paid or payable by one person to another. Where coal was purchased at the collieries and moved by the assessee through its own railway line, engine and wagons, the transportation expense was self-incurred and not a charge paid for transportation to another person, so it could not be added to the value of goods. The Explanation to Section 2(h) could not be invoked to sustain a remand without the statutory preconditions for determining wholesale price, and no finding showed the purchase documents were unreliable.

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Issues: Whether the assessee's own expenditure on transporting coal from the collieries to its plant, where no freight or transport charge was paid to any other person, could be included in the value of goods under Section 2(h) of the U.P. Tax on Entry of Goods into Local Areas Act, 2007, and whether the Tribunal could invoke the Explanation to that provision to sustain a remand.

Analysis: The expression "value of goods" under Section 2(h) includes transport charges and freight charges only where such charges are in the nature of an amount paid or payable by one person to another. On the admitted facts, the coal was purchased at the collieries and transported by the assessee through its own railway line, engine and wagons. The expenditure was incurred on own account and was not a charge paid for transportation to another person. In the absence of any legal fiction treating such self-incurred expenditure as a transport charge, it could not be added to the value of goods. The Explanation to Section 2(h) could be applied only after the statutory preconditions for determining wholesale price were satisfied, and no finding existed that the purchase documents were not worthy of credence.

Conclusion: The own transportation expense could not be included in the value of goods, and the Tribunal's remand based on the Explanation was unsustainable.

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