TaxTMI 
TaxTMI 
2023 (9) TMI 512
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....r of Assessment Officer-Assistant Commissioner, Commercial Tax Auditing, Jabalpur dated 04.05.2012 subjecting the petitioner to tax under CST Act, 1956 to the tune of Rs. 2,85,42,489/- against the declared inter state sale of petitioner of Rs. 1,70,31,403/-. 2. Following three substantial questions of law are proposed by appellant: "(i) In view of the aforesaid facts a substantial question of law arises as to whether the freight charged separately from the buyer would fall part of the sale price and tax levied on the freight component is legally correct or not. (ii) The activity of transportation is an activity of service and the same is taxable under the Finance Act, 1994 passed by the parliament which seeks to tax services including the service of transportation. On the other hand sale of goods is taxable under VAT Act legislated by the state legislature. The service tax and the VAT are mutually exclusive, applicable in respect of services and goods having regard to the respective parameters of service tax and sales tax and therefore the activity of transportation cannot be taxed under the CST Act. (iii) The freight charges collected separately as th....
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....le taking Suo Moto Revision of the Appellate order under Section 3A of the VAT Act while passing the impugned order ? (v) Whether, the mandates and interpretation held in WP No.7536/2014, Goldie Glass Industries vs. State of MP and others passed by the Division Bench of Hon'ble High Court are covered in the facts and circumstances of the present case and the impugned order does not stand to the scrutiny of law and liable to be set aside." 5. Learned counsel for appellant Shri Samagra Shrivastava as regards substantial questions of law 1, 2 and 3, submits that the same have been answered in favour of the assessee by Division Bench of Orissa High Court in its order dated 30.03.2021 in the case of M/s Utkal Moulders vs. State of Orissa, STREV No.29/2010 (vide Annexure A/9 to the Rejoinder of appellant filed on 20.09.2022). 5.1. It is further submitted by learned counsel for appellant that the remaining two substantial questions of law at Sr. No.4 & 5 also stand answered by decision of Coordinate Bench of this Court in the case of Goldie Glass Industries vs. State of M.P. and others rendered on 18.08.2017 in W.P. No.7536/2014 (Annexure A/7 filed alongwith the rejoinder).....
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....parately shown in the invoice. 23. Section 2(h) of the CST Act reads thus: "sale price" means the payable to a dealer as consideration for the sale of any goods, less than 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 of the cost of installation in cases where such cost is separately charged." 24. Having perused the sample of the invoices raised in the present case, which is not disputed by the DoT, it is seen that the Petitioner had indicated separately the freight charge of Rs. 45/-. The Tribunal committed a serious error in understanding of the freight charge to be same freight charge irrespective of the distance between the factory of the Petitioner and the destination of the Purchaser. The crucial factor, which was missed, was that the rate was an uniform rate of Rs. 45 "per piece" as this was for a supply of 50000 units. In almost identical facts, the Supreme Court in State of Karnataka v. Bangalore Soft Drinks Pvt. Ltd. (supra) hel....
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....t is the amount payable by the purchaser to the dealer as consideration for the sale and not as to what is the net consideration retainable by the dealer." 27. Thereafter, the Supreme Court proceeded to delineate the sample scenarious. 28. In the considered view of the Court, the legal position, as explained in Hindustan Sugar Mills and others v. State of Rajasthan and others (supra) and the State of Karnataka and another v. Bangalore Soft Drinks Pvt. Ltd (supra) supports the case of the Petitioner is that in the instant case the freight charges are not includable in the sale price, which is amenable and therefore, has to be excluded while calculating the taxable turn over for the purposes of the OST Act. 29. For the aforementioned reasons, the question framed is answered in negative that is in favour of the Petitioner-assessee and against the Department by holding that the Tribunal was incorrect in holding that the freight shown in the sale bill separately is part of the sale price. It is held that the Petitioner is entitled to claim deduction of the freight charges from the taxable sales turnover. 30. The revision petition is accordingly dispos....