1969 (7) TMI 97 - SC - VAT and Sales Tax

Claim for exemption of freight and packing and delivery charges in respect of which separate bills were made out when selling the goods at Ernakulam Held that - Appeal dismissed. There is no substance in the contention raised by counsel for the appellant that in authorising the levy of sales tax on transport charges which formed a component of the price for which the goods were sold, the State Legislature had trespassed upon the legislative field reserved to the Centre by List I, entry 89-the power to levy taxes on railway fares and freights. The tax levied is not a tax on railway freight & it is a tax on turnover, that is, on the aggregate of sale price received by the dealer in respect of sale-of goods. The fact that the price includes the expenditure incurred by the company for railway freight for transporting the goods from the factory site to its place of business does not make the tax imposed upon that component a tax on railway freight.

Summary

The appeal was dismissed by the Supreme Court of India. The appellant claimed exemption for freight, packing, and delivery charges, but the court ruled that these charges were not deductible. The court clarified that the tax imposed was on the turnover of the sale price, not specifically on railway freight. The appeal was dismissed with costs.