1968 (4) TMI 68 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether charges for adat, dalali, bank commission, charity, and insurance incurred by the assessee can be included in the sale price and taxed?
2. Whether the estimated price of packing materials (bardana and iron hoops) can be included in the taxable turnover of the assessee?

Analysis:

Issue 1:
The case involved a dealer in cotton whose turnover in inter-State trade was under scrutiny for including charges like adat, dalali, bank commission, charity, and insurance in the sale price. The assessing officer, Deputy Commissioner of Sales Tax, and Sales Tax Tribunal all upheld the inclusion of these charges in the turnover. The Court relied on the definitions of "turnover" and "sale price" under the Central Sales Tax Act, emphasizing that any amount received as consideration for the sale of goods must be included in the turnover. The Court found that the charges were part of the consideration paid by purchasers for the cotton, as admitted by the assessee. The burden of proof was on the assessee to show otherwise, which it failed to do. Therefore, the charges were rightly included in the sale price and turnover.

Issue 2:
Regarding the inclusion of the estimated price of packing materials in the taxable turnover, the Court examined the implied contract for the sale of hessian cloth and iron hoops along with compressed cotton. The assessee charged a composite price for the cotton and packing materials, and the property in the packing materials passed to the purchasers. Citing precedents and principles established by previous judgments, the Court held that there was an implied contract for the sale of packing materials even if the price was not separately fixed. The Court distinguished a previous case where a willing charge was paid separately, unlike in the present case where the entire amount was paid for purchasing cotton. Therefore, the estimated price of packing materials was deemed includable in the turnover.

In conclusion, both issues were answered in the affirmative, affirming the inclusion of charges and estimated price of packing materials in the taxable turnover. The Court directed the assessee to pay the costs of the reference, with the counsel's fee fixed at Rs. 150.