1978 (4) TMI 231 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Assessability to sales tax of the turnover on containers (bottles) in which liquor was sold.
2. Justification of the Appellate Tribunal in affording the assessee an opportunity to produce C forms for concessional assessment under the Central Sales Tax Act.
3. Exclusion of insurance charges from the turnover.

Detailed Analysis:

1. Assessability to Sales Tax on Containers:
The primary issue in the first batch of revisions (T.R.C. Nos. 4, 7, 11, 12, 13, 14, 15, and 24 of 1977) was whether the turnover on containers (bottles) in which liquor was sold is assessable to sales tax. The assessee, M/s. McDowell & Co., argued that the amounts described as "deposit on bottles" were not part of the sale price of the liquor. The Sales Tax Officer allowed deductions only for the bottles returned, while the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal found that the deposits were part of the sale price. The Tribunal's findings, which were accepted by the High Court, included that the deposits were separately invoiced and treated differently in the accounts, and thus did not satisfy the definitions of "turnover" and "sale price" under the Central Sales Tax Act. The Court distinguished this case from the Supreme Court's decision in Punjab Distilling Industries Ltd. v. Commissioner of Income-tax, Simla, noting that the facts and statutory provisions were different. The High Court affirmed the Tribunal's conclusion that the deposits were not part of the sale price and thus not assessable to sales tax.

2. Opportunity to Produce C Forms:
In the second batch of cases (T.R.C. Nos. 25, 27, and 28 of 1977), the additional issue was whether the Tribunal was justified in allowing the assessee to produce C forms for concessional assessment under the Central Sales Tax Act. Section 8(1) and (4) of the Act require the dealer to furnish a declaration in the prescribed form to avail of concessional rates. The Tribunal had set aside the orders of the lower authorities and directed the Sales Tax Officer to allow the assessee to produce the C forms. However, the High Court found that this direction was beyond the Tribunal's authority, as Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, allows the prescribed authority (Sales Tax Officer) discretion to permit the furnishing of such declarations within a further time. The High Court vacated the Tribunal's direction and allowed the revisions to this limited extent, affirming that the matter should be left to the discretion of the Sales Tax Officer.

3. Exclusion of Insurance Charges from Turnover:
In the third batch of cases (T.R.C. Nos. 55 to 59, 62, and 104 of 1977), the additional issue was whether insurance charges should be excluded from the turnover. The definition of "turnover" under the Central Sales Tax Act excludes the cost of freight or delivery when separately charged. The High Court agreed with the assessee's counsel that the cost of freight or delivery should include the cost of insurance, given that insurance has become an integral part of commercial transactions due to the risks involved. Consequently, the High Court upheld the Tribunal's decision allowing the deduction of insurance charges from the turnover.

Conclusion:
The High Court dismissed all the tax revision cases except T.R.C. Nos. 25, 27, and 28 of 1977, which were allowed to the limited extent of vacating the Tribunal's direction to afford the assessee an opportunity to produce the C forms. No order as to costs was made.