TaxTMI 
TaxTMI 
2002 (7) TMI 762
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....etermined the total and taxable turnover at Rs. 2,13,412. 3.. The difference in the determination of total and taxable turnover for the two assessment years in question arose due to the following circumstances. The assessee was the licence holder to mine the minerals at Nadanthai village in Namakkal taluk in Salem district and the assessee also had its own crushing unit in the above place. The assessee after unearthing the stones from the mines at Nadanthai transported the same from the said mines to the grinding unit, ground the stones there at its own risk and sold the calcite powder and lime stones both within and outside the State of Tamil Nadu. 4.. The dispute is in relation to the inclusion of grinding charges, loading and unloading charges, transport charges and freight charges in the taxable turnover. The place of the business of the assessee was inspected by the officials of the Enforcement Wing, Salem, and they found that there were serious defects in the maintenance of the accounts by the assessee. During the course of investigation, the Inspecting Officials unearthed a bill book relating to the business of the assessee for the assessment years 1987-88 and 1988-89 and ....
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....essee had not produced the same at any earlier stage of the proceedings and they were produced after the matter was remanded in appeal. He rejected the letters produced by the assessee and held that there was wilful default on the part of the assessee in not returning the turnover in question and levied penalty for both the assessment years. 5.. The Appellate Assistant Commissioner on appeal held that there were no two separate distinct contracts one for the purchase of the raw material and the other for grinding the raw material and the assessee has not produced the same. He also found that there was no evidence to show how the assessee had transported the raw materials from the mines to the grinding unit and that how it was dealt with and for whose behalf the work was done. The Appellate Assistant Commissioner also found that the letters produced by the assessee were silent about the quantity proposed to be purchased and they have not indicated to whom the delivery of stones was to be made in the mines. The assessee has not produced the despatch slip prescribed by the Revenue Department in respect of removal of stones from the mines. He therefore upheld that the inclusion of pre....
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....ct 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." The Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 considered the scope of the definition of "sale price" as defined under section 2(h) of the Central Sales Tax Act. The Supreme Court was dealing with the case of levy of sales tax on the sale of cement under the Cement Control Order and the question that arose before the court was whether the railway freight would form part of the sale price when the price of the cement was mentioned as "free on rail destination railway station". The Supreme Court while construing section 2(p) of the Rajasthan Sales Tax Act which defined the expression "sale price" which is in pari materia with the definition of the phrase in section 2(h) of the Central Sales Tax Act, held that the freight amount paid would form part of the sale price. The Supreme Court held as under: "This definition is in two parts. The first part says that 'sale price' means the amount payable to a dealer as consideration for the sale of any goods. Here, the conc....
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.... amount for the price of finished products which included the amounts towards sales tax, freight and handling charges. The assessee subsequent to the sale prepared the relevant sales bills and they indicated that the grinding charges, loading and handling charges and transport charges were paid separately but the assessee has not produced any proof to show that there was an agreement to sell only the stones and not the calcite powder nor lime stone powder. This Court in State of Tamil Nadu v. Cauvery Cotton Trading Company [1996] 101 STC 19 held that the onus of proof is on the assessee to show the terms of the agreement. The assessee has not proved the grinding was done subsequent to the sale of the mineral and the loading and handling of the goods were done subsequent to the sale of mineral and freight charges was paid subsequent to the sale of the raw material. Though the assessee has produced two letters, the authorities have rightly rejected the same as not genuine as they were of recent origin and they did not even mention the quantity to be purchased and were produced at a very late stage of the proceedings. The assessee, apart from the two letters which were rejected as not....
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....C 132 and in both cases it was found that the intention of the dealer was to exclude the freight and delivery charges and hence this Court found no difficulty in holding that freight and delivery charges did not form part of "sale price" as the cost was separately charged. 10.. We find that the assessee has not discharged the burden cast on it that there was an agreement to sell the raw material and subsequent activities were done with reference to the articles purchased by the purchaser subsequent to the sale. Hence, we hold that the order of the Appellate Tribunal directing the exclusion of the grinding charges, loading charges, handling charges and transport charges from the taxable turnover for the two assessment years in question is not sustainable in law. 11.. In so far as the order of the Appellate Tribunal upholding the cancellation of levy of penalty is concerned, we are of the view that the Appellate Tribunal has come to the correct conclusion that the levy of penalty is not warranted on the facts of the case. The finding of the Appellate Tribunal is that there was no wilful nondisclosure in the return and it is a pure finding of fact. The assessee had disclosed the tur....