TaxTMI 
TaxTMI 
1983 (2) TMI 264
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....ing to Rs. 89,253. The assessees deducted these freight charges from their turnover on the ground that they did not form a part of the sale price. The Sales Tax Officer, however, held that the amount of freight charges could not be so deducted and it formed a part of the sale price. The assessees were taxed accordingly. From the order of the Sales Tax Officer the assessees preferred a first appeal before the Assistant Commissioner of Sales Tax. The Assistant Commissioner, however, confirmed the order of the Sales Tax Officer. Thereafter the assessees preferred a second appeal being Second Appeal No. 708 of 1976 before the Tribunal. The Tribunal also upheld the decision of the Assistant Commissioner and dismissed the appeal. At the instan....
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....he terms and conditions of the sale contracts of the assessees have been advanced before us on the basis of this order form. 3.. In the order form it is mentioned that the price which is charged by the assessees for the goods sold by them is f.o.r. place of destination. In the sample order form this price is mentioned as Rs. 7.90 per litre f.o.r. Jullundur net-Jullundur being the place where the goods were received by the purchasers. In other words, the sale price quoted on the sale order is inclusive of freight up to Jullundur, and the buyer is not required to pay any freight in addition to the price of the goods. Condition No. 5 which is printed at the back of the order form is as follows: "Our responsibility ceases when the goods are ....
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....ess the amount of freight. Under section 2(h) of the Central Sales Tax Act, 1956, " 'sale price' means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged". Thus, sale price means the amount payable to a seller as consideration for the sale of goods, less certain amounts which are allowed to be deducted as per the definition in section 2(h) of the Central Sales Tax Act. If ....
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....eparate item in the invoice. Where the cost of freight is part of the price, it would fall within the first part of the definition and to such a case, the exclusion clause in the second part has no application." If, therefore, the price which is charged is covered by the first part of the definition in section 2(h) of the Central Sales Tax Act, 1956, it would not fall within the second half of the definition. In other words, if the buyer is required to pay by way of sale price an amount which would cover all costs, charges and expenses incurred by the seller, including freight, then that amount represents the sale price on which sales tax can be levied. Subsequently splitting up the payment of this sale price by asking the buyer to pay f....
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.... This right and the corresponding liability can only be a matter of contract between the seller and the buyer. If it is not a matter of contract, then there is no right in a seller to raise a separate charge against the purchaser, nor any corresponding obligation on the purchaser to make payment of the amount so separately charged. 6.. We have, therefore, to see whether there was any contract between the buyer and the seller in the present case under which the seller had contracted to charge the buyer separately for freight and the buyer had correspondingly undertaken an obligation to pay for freight separately. From the order form which is before us we do not find any such obligation undertaken by the buyer. On the contrary, the terms o....
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.... are typed on the face of the order form, they would not prevail. Under the terms of the contract, therefore, it was not open to the assessees to charge their buyers separately for freight in addition to the price. In fact, the invoice which is sent is also on the basis that the price was inclusive of freight. It may be open to the seller to split up the recovery of the price or agree, that the amount of freight would be paid by the buyer on the seller's behalf and the balance amount of price would be collected by the seller from the buyer, and this is in fact done in the present case. The invoice shows that the sellers have given to the buyer credit for the amount of freight which is paid by the buyer and have recovered from him the bal....