Dismissed

Commercial Taxs Officer v. M/S Roca Bathroom Products Pvt. Limited

Rajasthan HC19 Jan 2022STR/282/2018

Case brief

AI extract

What is this about?

In this revision petition, the Revenue challenged the deletion of tax on freight. The High Court held that the Tax Board was justified as freight was separately reflected in invoices, distinguishing the Apex Court's decision based on statutory differences and specific facts regarding separate charging.

What did the court decide?

The revision petition was dismissed as no interference is called for regarding the deletion of tax on separately charged freight.

Commercial Taxs Officer Vs M/S Roca Bathroom Products Pvt. Limited — Rajasthan HC (2022) — LawSathi Research

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶2

D.B. Sales Tax Revision / Reference No. 282/2018

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Commercial Taxes Officer, Anti-Evasion, Circle-II, Jaipur

¶4

----Petitioner

¶5

Versus

¶6

M/s. Roca Bathroom Products Pvt. Limited, 223-226, M.I.A. Alwar

¶7

----Respondent

¶8

For Petitioner(s) : Mr. Punit Singhvi through VC For Respondent(s) : Mr. Vivek Singhal through VC

¶9

HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SAMEER JAIN

¶10

Judgment

¶11

19/01/2022

¶12

The appellant-revenue has filed this sales tax revision under Section 84 of the Rajasthan Value Added Tax Act, 2003 read with Section 86 Rajasthan Sales Tax Act, 1994 against the order dated 05.06.2018 passed by the Division Bench of Rajasthan Tax Board in appeal No.902/2017.

¶13

The issue in consideration as formulated by the revenue pertains to, whether in the facts and circumstances of the case the Rajasthan Tax Board was justified in law in not appreciating the provisions of Section 2(36) of the RVAT Act and Section 2(h) of CST Act and thereby deleting the tax, interest of penalty qua the freight amount which was part of invoice?

¶14

Learned counsel for the petitioner-revenue Mr. Punit Singhvi submits that with regard to freight value and assessable value in computation, the issue is no more res-integra in the light of

¶15

(2 of 4)

¶16

[STR-282/2018]

¶17

judgment passed in India Meters Ltd. Vs. State of Tamil Nadu reported in 2010 (9) SCC 423 whereby the Apex Court has held that freight and insurance charges are held to be part of sale price. The next contention of petitioner was that the same is charged on the invoice and therefore, the same will constitute consideration as per provisions of the RVAT Act, 2003 and CST Act, 1956.

¶18

Per contra, the submissions of learned counsel Mr. Vivek Singhal for the respondent-company is that the Tax Board while passing the impugned order dated 05.06.2018 has categorically held in para 11 as under:-

¶19

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¶20

Sec.2. Definitions – (RVAT Act, 2003)

¶21

(36) “sale price” means the amount paid or payable to a dealer as consideration for the sale of any goods less any sum allowed by way of any kind of discount or rebate according to the practice normally prevailing in the trade, but inclusive of any statutory levy or any sum charged for anything done by the dealer in respect of the goods or services rendered at the time of or before the delivery thereof, except the tax imposed under this Act;

¶22

Explanation III. - Where according to the terms of a contract, the cost of freight and other expenses in respect of the transportation of goods are incurred by the dealer for or on behalf of the buyer, such cost of freight and other expenses shall not be included in the sale price, if charged separately in the invoice;

¶23

Sec.2. Definitions – (CST Act, 1956)

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(h) “sale price” means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any

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(3 of 4)

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[STR-282/2018]

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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. "

¶28

As per respondent’s counsel provisions of Section 2(36) of the RVAT Act, 2003 and Section 2(h) of CST Act, 1956 defines sale price, which specifies that if freight cost is separately charged in the invoice and not included in the sale price, the same will not be included in the assessable value. He further submits that judgment cited by learned counsel for the petitioner is not applicable in the present facts and circumstances.

¶29

On consideration of the said arguments advanced by the petitioner as well as respondent and on scanning of revision petition, we are of the view that as contained in para 11 of the impugned order specific finding has been given that freight/transport cost was separately reflected in the invoices on actual expenditure. No extra consideration was received by the respondent on account of cost of freight and therefore, the same is in conformity with the provisions of Section 2(36) and Section 2(h) of RVAT Act, 2003 and CST Act, 1956 respectively and will not form part of assessable value. The judgment of Hon’ble Apex Court in India Meters Ltd. (supra) relied upon by revenue wherein it was held that, freight cost will form part of sale price, is distinguishable on following counts:-

¶30

(i) The provisions of RVAT Act, 2003 and CST Act, 1956 are not pari materia to the provisions of Tamil Nadu General Sales Tax Act, 1959.

¶31

(ii) In that matter the goods in question were electric meters and were supplied to the Electricity Board and the delivery was not ex-factory.

¶32

(4 of 4)

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[STR-282/2018]

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(iii) Both the appellate authorities have concurrently held on the basis of invoices, books of accounts and records that freight cost/transport cost was separately reflected in the invoices.

¶35

On account of the said reasons we are of the view that no interference is called for in the present revision petition. The same is hereby dismissed.

¶36

(SAMEER JAIN),J

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(AKIL KURESHI),CJ

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Arun/19

Commercial Taxs Officer v. M/S Roca Bathroom Products Pvt. Limited

Case brief

What is this about?

What did the court decide?

Commercial Taxs Officer v. M/S Roca Bathroom Products Pvt. Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

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