Dismissed

M/S Jyoti Structures Ltd. v. Addl.Commissioner Com.Tax,Raipur

Chhattisgarh HC3 Mar 2015WP/760/2005

Case brief

AI extract

What is this about?

In this writ petition challenging a commercial tax order, the High Court examined whether freight charges integrated into the sale price were exempt. Relying on Supreme Court precedents, the Court held freight is part of sale price and is not separable for exemption, dismissing the petition.

What did the court decide?

Petition dismissed holding freight charges as part of sale price.

M/S Jyoti Structures Ltd. Vs Addl.Commissioner… — Cheque Dishonour | Chhattisgarh HC (2015)

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Q9
$
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HIGH COURT OF CHHATTISGARH AT BILASPUR

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Single Bench: Hon’ble Shri Justice Sanjay K. Agrawal

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Writ Petition No. 760 of 2005

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PETITIONER

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M/s. Jyoti Structures Limited

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Versus

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RESPONDENTS

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«Post for pronouncement on

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SdlSanjay K-^Agrawal Judge

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HIGH^{COURTOFCHHATTISGARHATBILASPUR}

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Single^{Bench:Hon’bleShriJusticeSanjéyK.Agrawal}

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Writ Petition^No.760of2005

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PETITIONER

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: M/s. Jyoti^{StructuresLimited}

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Versus

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Aggearance^ofthecoun s Shri H. B. Agrawal, Sem o Jaiswai,^{counselforthepetiti} o General and Shri Gary Shri A. S. Gaharwar, Ad g yo te ate/Respondents. o Mukhopadhyay,^Govt.Adv ‘

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o R D E R

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(Delivered^{on03.03.2015)}

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Invoking^{extraordinaryjurisdictionofthisCourtunderArticle227}

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(1) of the^{Constitutionoflndia,thepetitionerhereincallsinquestion} by

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the legality, validity and correctness of order passed Commercial Tax, Raipur dismissing

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Additional Commissioner, in exercise^ofits

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the revision^onthe question^{offreightcharges} under Section 62(1) of the Chhattisgarh

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revisional jurisdiction ‘the Act, 1994) affirming

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Commercial^{TaxAct,1994(henceforth} .

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,, ‘

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' \ rl r \

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07g

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the order passed by Assessing Authority dated 17.04.2000 assessment.

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l , ., V

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(2) The petitioner claimed exemption of tax from freight charge, charged in the bills before^{therespondentNo.2.} The petitioner after getting^ordersof purchase^{fromthepurchasersstartswork} of manufacturing of transmission tower and in the said manufacturing cost of production, profit, taxes and'.\freight ........... . .‘ s _, t shownln bill. ...... e No.2 declined^to grant^exem p respondent No.1. T h t No.1/Revisional Authority dismissed^therevisiona order passed^byAssessing

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Authority.

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(3) Against the said o petition has been filed, the said order of Revisional Authority. The questioning respondent/State^has filed the return stating inter alia that^the petitioner^{wasnotentitledtoexemptionofCentralSalesTaxon} the amount of freight^charge as alleged andthe assessment order as^{wellastherevisionalorderhasbeenvalidlypassed.} Shri H. B. Agrawal, learned Senior counsel for the petitioner (4) would submit^{thatthefreightchargeswaschargedseparatelyfor} the assessment year^{01041997to31031998and} In View^of definition contained in Section^{2(h)ofCentralSaleTaxAct} the entitleJfor exemption and as such order of the petitioner’is

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Assessing Authority duly affirmed by the Revisional Authority is liable to be set aside.

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(5) On the other hand, learned counsel for the respondents/State would submit that the concurrent finding recorded by two courts below holding that the freight charges were the part of the sale price^{andliabletobeincludedinthetaxableturnoverisfindingof} fact and cannot be interfered with in exercise of jurisdiction a d as such writ ..... (6) > de ration is whet h‘s ga1 th the authorities are justified I t freight charges constitutes

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part^ofthesale price?

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(7) In order to answer t h ised at the bar, it would be appropriate to notice d price^{aswellasturnover}

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defined in the Act of 1956. Sec 2(h) & 2(j) of the Central Sales Tax Act, 1956 state as under:-

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“2(h) "sale price”^{meanstheamount} payable^todeaier as consideration for the sale of any goods, ............. but inciusive 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.”

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“2(J) ........ the aggregate of the sale prices received and receivable by him in respect of sales of any goods in course of interstate trade or commerce made during " any prescribed period ........ ,

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Before entering into the factual score, if would be proper to (8) notice the^Iawonthe point^{raisedanddecisionrenderedbytheir} Lordships of the Supreme^Court in case of Hindustan^Sugar Mills Vs. State^{ofRajasthanandothers1,wherein} it has been held that amount^{offreightandhandlingchargesincludedinthe} price^would obviously part of the sale price by observing as unden-

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of‘lf a ctory to his plac a, price which is arrived at b unt ‘freight and in g charges‘ iuncrreh transporting^th e handling charg e a e price ’, be the part of t e because it would be t; h e dealer^as part^ofthe payable^bythep consideration for ‘freight would be the leg even if the and handling carges’hN parately in the bill and 'I for the character^ofthe added to the prⁱ ‘ would me. Since freight and payment handling^charges’ p enditure^{incurredbythe} delera in^makingte h goosd available to^the purchaser e at the price^{ofsal,theywouldconstituteanadditionto} the cost of^the goods^{tothedealerandwouldclearlybe} a component^ofthe price^{chargedtothepurchaser.The} amount of ‘freight and handling charge’s would be payable by the purchaser not under any statutory or other liability but as part of the consideration for the it would, therefore, form part^of sale of the goods^and ‘sale within the meaning of first part of the price’ definition. Tish position is also well settled having regard to the decisions of tish Curto in Dyer Meakin Breweries Ltd. Vs. Sales Tax Officer, Enakula (XXVll STC 120).”

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l (1978)4^scc271 I

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(9) In TVL. Ramco Cement Distribution Co. (P) Ltd. Vs. State of Tamil Naduz, their Lordships of SupremerCourt noticing the decision Hindustan Sugar Mills (supra) has held that freight charges should be included in arriving at the taxable turnover for the purpose of CST, if it is included in the sale price and held as unden—

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“15. We, therefore, hold—

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e included in ‘( u) that packing; should also bf rrlvmg at the taxable turnover for purp; C ST andTNST"

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\.,, « y

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(10) In India Meters Lim i State of Tamii Nadu3, their Lordship of the Suprer s held that where seller is under obligation to tra n' to place^bybuyerand has paid freight charges, then expenditure incurred by seller forms part of sale price. Relevant paragraphs of the report state as unden“17. “Sale” is defined in Section 2(n), inter alia, as meaning " every transfer of property in goods (other^than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of business for cash, deferred payment or other valuable consideration". The definition goes on to include a number of other transactions also within that definition 0t “sale”. The turnover of, an assessee/dealer would include the

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2 (1‘993)^1scc192 3 (2010)^9scc423

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aggregate amount for which goods are bought or sold. It is, therefore, the amount^forwhichthe goods are bought or sold,^whichform p‘artrof^theturnover, and a thing can be said to be soid only when the transaction falls within^{thescopeofthedefinition} of “saie”.

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(11) it has further been^{heldbytheirLordships} in later part of the above referred judgment^asunder:—

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"37. When we apply the ratio of the judgments of the English courts our courts the concluSIon «a nt of freight and.

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wi relevant clause of the

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contract the ow goods^{WillremainWih} t the supplier till e red at the destination station In View of clause of the contract,^no other View is po ’ our‘Nt considered view, the High Court w M ified in affirming the judgment of t h’ é interference is called

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(12) Judged by authoritative pronouncement laid down by their Lordship of the Supreme C ourt in the above referred cases it is tnsparentlyra clear that the amount of freight

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(supra), charesg forms part of teh sale price within the meaning of Section 2(h) of the Act,^195, 6^{andhastobetakenintoaccount} wileh determining the sale price, if it is included in the cost of pce.ri

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(¹³⁾ Bearing in mind the principles^{oflawflowingfromthedecisions} of their Lordships of t he Suemepr Court in the above noted cases (Supra), if the facts of the present^{caseareexamined} it

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would appear that the Assessing Authority has clearly reached to the conclusion the petitioner/Company manufactured the transmission towers after receiving purchase order from various firms; and the petitioner Company entered into agreement where all amounts including freight and transportation charges were included into sale price; and freight charges were integral part of the sale price and the petitioner Company not only manufactured the petitioner— supplied the transmission to .A,d installed a ces indicated Egg hose purchasers^andthes a reight on Receipt" (F.O.R.) installation meaning th en o uld constitute a sale price whereby the seller included the price of ’ ‘ transportation into the oduct. Thus, the Assessing Authority has clearly reached to the conclusion that the freight charges were included in the sale price/contract price, therefore the petitioner^was not entitled for exemption. The aforesaid finding of fact recorded by the Assessing Authority has prevailed with the revisional authority by affirming the findings of the Assessing Authority that petitioner/Company manufactured the transmission towers supplied it, installed in indicated by the purchasers^ofthesale price^{includedthefreightchargesasthe} seller has already included the price^{oftransportation} into the " price of product. Thus, the concurrent finding recorded by the 1

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two authorities are finding of fact based^{onmaterialavailableon} record and l do not find any jurisdictional error in the^saidfinding. The said finding being the finding of fact, no interference is called in exercise of jurisdiction under Article 227 of the Constitution of India.

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(14) As a fall out and the consequence of^{theaforesaiddiscussion,} the petition is held tow b f merit and is,"therefore,

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Sd/Sanjay K-^Agrawal Judge

M/S Jyoti Structures Ltd. v. Addl.Commissioner Com.Tax,Raipur

Case brief

What is this about?

What did the court decide?

M/S Jyoti Structures Ltd. v. Addl.Commissioner Com.Tax,Raipur

Case brief

What is this about?

What did the court decide?

What the court decided

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