TaxTMI 
TaxTMI 
2017 (10) TMI 490
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....tion of clause (c) of sub­section (2) of section 36 read with Explanation (I) to the Bombay Sales Tax Act, 1959, the Tribunal was justified in law in deleting the penalty by placing reliance on the ratio of the decision of the Bombay High Court in case of Indoswe Engineers (P) Ltd. Vrs. State of Maharashtra (101 STC 177) ? 2] If the question at Sr.No.1 is answered in affirmative, then it may not be necessary for us to decide the question of law at Sr.No.2. But, if we decide the first question in negative, then second question will have to be decided on its own merits. 3] Before considering the question No.1, the decision of the Apex Court in the case of Hindustan Sugar Mills vrs. State of Rajasthan and others, reported in (1978) 4 SCC 271 will have to be considered being the landmark judgment throwing light on the controversy involved and considered by the Tribunal also. In the said decision, the Apex Court considered the question as to whether in sales of cement effected under the Cement Control Order, 1967, the amount of "freight" forms part of the sale price so as to be exigible to sales tax under the provisions of the Rajasthan Sales Tax Act, 1954 and the Central Sale....
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....hey would constitute an addition to the cost of the goods to the dealer and would clearly be a component of the price charged to the purchaser, which would form a part of 'sale price' within the meaning of first part of the definition. 6] The Court thereafter considers another example based upon the contract of sale entered into between the parties, where the dealer instead of transporting the goods from his factory or his place of business and selling them there, enter into a contract of sale freight on rail (F.O.R.) destination railway station. Where such a contract is made, the seller undertakes an obligation to put the goods on rail and arrange to have them carried to the destination railway station at his expense. The delivery of the goods to the purchaser in such a case is complete at the destination railway station and till then the risk continues to remain with the dealer. The Court holds that agreed price being inclusive of the freight, it would be a matter of indifference to the purchaser as to the amount of freight, even if there is any fluctuation. The Court holds that when the purchasers pay the amount of freight in such a case, it would be as part of the ag....
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....ailed of by the assessee only if the State seeks to rely on the inclusive clause for the purpose of bringing a particular amount within the definition of 'sale price'. It further holds that if the State is able to show that particular amount falls within the first part of the definition and is, therefore, part of the 'sale price', the exclusion clause cannot avail the assessee to take the amount in question out of the definition of 'sale price'. 9] In the present case, the assessee is the dealer in cotton bales and is registered under the Bombay Sales Tax Act, 1959 (in short "the BST Act") as well as the Central Sales Tax Act, 1956 (in short "the CST Act"), as dealer. In the return filed by the assessee for the period from 25.10.1984 to 12.11.1985 and 13.11.1985 to 02.11.1986 under the provisions of BST and CST Acts, the deduction of amount of insurance of Rs. 51,373/­ and freight/carrying charges of Rs. 11,00,523/­ was claimed on the ground that the same do not constitute 'sale price' as defined under Section 2(29) of the BST Act and Section 2(h) of the CST Act. Though the authorities below have held that the said amount was taxable, the ....
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....urnover of purchases made on or after the notified day. The "turnover of sales" is defined under Section 2(36) of the BST Act means the aggregate of the amounts of sale price received or receivable by a dealer in respect of any sale of goods made during a given period after deducting the amount of sale price, if any, refunded by the dealer to purchaser, in respect of any goods purchased and returned by the purchaser within the prescribed period. 14] Section 2(29) of the BST Act defines "sale price". The relevant portion of the definition is reproduced below; " 'Sale price' means the amount of valuable consideration paid or payable to a dealer for any sale made including any sum charged for anything done by the dealer in respect of goods at the time of or before delivery thereof, other than [the cost of insurance for transit or of installation] when such cost is separately charged". The aforesaid definition of "sale price" is capable of same interpretation of the expression "sale price" considered by the Apex Court in the judgment in Hindustan Sugar Mill's case, cited supra. The first part says that 'sale price' means the amount of valuable considerat....
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....ontention for the reason that, to attract the first part of the definition of "sale price" under Section 2(29) of the BST Act, the real test laid down in the decision cited supra is that such charges are the components of the sale consideration. The said decision further holds that such charges borne by the seller should be shown to have been for making the goods available to the buyer at the place of sale. Such is also not the finding by the Tribunal in the present case. 17] In the decision of M/s. India Meters Limited vrs. State of Tamil Nadu, delivered by the Apex Court in Civil Appeal No. 1032­33 of 2003, decided on 07.09.2010, relied upon by Shri Ukey, the learned Additional Government Pleader, it was the obligation to pay freight as the goods were to be delivered to the premises of buyer which was incurred by the seller and therefore, the Apex Court has held that the amount of freight was included in the definition of "sale price". In para 15 of the said decision, the Apex Court clearly holds as under : "15. The transfer of title to the goods as provided in clause 10 read with clause 6 of the agreement was to be at the place of delivery in the premises of the buyer.....
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....the transfer of right to use the goods is deemed to be sale of goods, attracting the incidence of tax. 19] In the present case, the Tribunal has recorded in para 12 of its judgment dated 07.06.1996 delivered in Second Appeal Nos.1337, 1338 and 1339 of 1991 that the perusal of the documents will show the following facts : (a) Delivery is a spot delivery; (b) Insurance charges are as per the desire of the buyer; (c) Carrying charges are in the shape of the compensation for stacking, destacking carriage of goods; (d) In certain cases, no insurance is taken by the assessee; and (e) There are no carrying charges if the goods are collected within the specified period. In para 13, the Tribunal holds that the goods are specific and in deliverable stage, without requiring the assessee to do anything to them for making them deliverable. It further holds that since it is a spot delivery, the burden of the buyer is to collect the goods and convey them to whichever destination he chooses. However, in order to facilitate this, the assessee may render the services to the buyer. The Tribunal further holds that these factors will clearly show that the delivery of the goods is c....