1976 (2) TMI 154 - HC - VAT and Sales Tax

Summary

Issues involved: The judgment involves the assessment of exemption claims by a cooperative society under the Co-operative Societies Act for various turnover items, including incentive payments, transport charges, sale of pressmud, bagasse, and sugarcane standard mixture.

Assessment of Exemption Claims: The assessees, a cooperative society, claimed exemption for five items in their turnover. The assessing officer disallowed the exemption for all items, but the Appellate Assistant Commissioner allowed exemption for three items. The Tribunal upheld exemption for transport charges separately paid by the assessees and dismissed the revenue's petition for enhancement on other items.

Transport Charges Exemption: The Tribunal allowed exemption for transport charges separately paid by the assessees to cane-growers based on a separate agreement. The dispute arose regarding the applicability of rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959, which allows deduction of freight charges if specified and charged for separately.

Interpretation of Rule 6(c)(i): The Court interpreted rule 6(c)(i) to apply only to selling dealers showing price and freight separately in invoices, not to purchasing dealers including purchase turnover. The Court emphasized that the manner in which the seller prepares the invoice is crucial in determining if transport charges can be excluded from taxable turnover.

Decision on Transport Charges: The Court held that transport charges paid to cane-growers by the assessees should be included in the taxable turnover as part of the price, as the purchasing dealer cannot deduct such charges under rule 6(c)(i). The Tribunal's decision to allow exemption for transport charges was set aside.

Final Decision: The Court ruled that transport charges and turnovers for press-mud, bagasse, and standard mixture should be included in the taxable turnover. The revision petition was allowed in part, and the revenue was awarded costs.