2015 (1) TMI 682

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....489 of 2001 for the assessment year 1997-1998 and the same was admitted on the following questions of law: (i)On the facts and circumstances of the case, whether interest collected admittedly for the belated payment of the sale price can constitute pre-sale charges to be subjected to sales tax? (ii)When sale by delivery of the goods took place and subsequently, for the belated payment of sale price interest was collected, whether it can partake the character of sale price attracting the levy of sales tax? (iii)Is the Tribunal justified in applying the ratio of the decision of this Court in L&T McNeil Limited v. State of Tamil Nadu, (1990) 79 STC 70, notwithstanding the fact that in the instant case, sale by delivery of the goods took pla....

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....t. For better clarity, it would be apposite to refer to paragraphs (12) and (13) of the order passed by the Tribunal, which read as under: "12. We are of the view that our Honourable High Court as in the case law cited above categorically held that interest has to be linked to the payment of delivery and they would form part of sale consideration. Further it has to be noticed that the buyers have agreed to pay interest for the belated payment in the very same invoice and not under an independent agreement. Hence the contract of sale between the assessee and its buyers included the payment of interest on belated payment at some agreed rate. Therefore, the receipt of interest on belated payment cannot be said to be arising out of a post-sale....

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.... consideration for the sale of goods which took place only at the time of delivery. In our view, the aggregate amount received by the assessee will include all payments made in consideration of the sale. We are not able to agree with the contention of Mr. K. J. Chandran, the learned counsel appearing for the petitioner, that the 'interest' and 'commitment charges' are something different and they cannot be included in the taxable turnover. We are of the view that instead of making a further revision of the sale price to compensate for the delay of goods, the parties agreed to the payment of 'commitment charges' by way of interest on the outstanding up to the time of delivery. We are also of the view that it cannot be....