1982 (1) TMI 172 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Implied agreement to deliver goods at the destination of purchasing dealers.
2. Inclusion of packing charges in the turnover of sale price under the Gujarat Sales Tax Act, 1969.
3. Inclusion of various charges in the sale price under the Gujarat Sales Tax Act, 1969.
4. Inclusion of packing charges in the turnover of sale price under the Central Sales Tax Act, 1956.
5. Inclusion of various charges in the sale price under the Central Sales Tax Act, 1956.
6. Breach of declarations in form 19.
7. Classification of timber as consumable stores for manufacturing purposes.

Detailed Analysis:

1. Implied Agreement to Deliver Goods at the Destination:
The Tribunal found that the delivery of goods was ex-destination, meaning the property in the goods did not pass to the purchasers until the goods were delivered at their destination. This was based on the fact that the goods were fragile and required special handling, which was provided by the assessee. The Tribunal concluded that there was an implied agreement to deliver the goods at the destination, and the purchasers would not have accepted the goods if the delivery was ex-factory.

2. Inclusion of Packing Charges in the Turnover of Sale Price under the Gujarat Sales Tax Act, 1969:
The Tribunal held that packing charges recovered under the white bills were part of the turnover of the sale price. The Tribunal found that these charges were incurred before the goods were ready for delivery ex-factory, indicating that they formed part of the sale price.

3. Inclusion of Various Charges in the Sale Price under the Gujarat Sales Tax Act, 1969:
The Tribunal held that charges for handling, loading, unloading, delivery at the destination, iron strapping, binding, and lafa charges shown in the yellow bills were part of the sale price. The Tribunal found that these charges were incurred to ensure safe delivery of the goods to the destination, which was an obligation under the contract.

4. Inclusion of Packing Charges in the Turnover of Sale Price under the Central Sales Tax Act, 1956:
The Tribunal held that packing charges charged in the white bills were part of the turnover of the sale price under the Central Sales Tax Act, 1956. The Tribunal found that these charges were incurred before the goods were ready for delivery ex-factory, indicating that they formed part of the sale price.

5. Inclusion of Various Charges in the Sale Price under the Central Sales Tax Act, 1956:
The Tribunal held that charges for packing, handling, iron strapping, binding, and lafa charges charged in the yellow bills formed part of the sale price under the Central Sales Tax Act, 1956. The Tribunal found that these charges were incurred to ensure safe delivery of the goods to the destination, which was an obligation under the contract.

6. Breach of Declarations in Form 19:
This issue was not pressed by the learned counsel for the assessee during the hearing, and therefore, it was not required to be answered.

7. Classification of Timber as Consumable Stores for Manufacturing Purposes:
The Tribunal initially held that the purchase of timber for making crates was not permissible under form 19 declarations and subjected it to purchase tax. However, the Tribunal's decision was based on its earlier decision in Vasuki Carborundum Works, which was later held to be erroneous by the High Court. The High Court concluded that packing materials could be considered consumable stores, and therefore, the purchase of timber should not be subjected to purchase tax.

Conclusion:
- Question No. 1: The property in the respective contracts of sale of glass between the assessee-company and the respective purchasers passed to the purchasers at the destination.
- Questions Nos. 2 to 5: Answered in the affirmative, in favor of the revenue and against the assessee.
- Question No. 6: Not pressed.
- Question No. 7: Answered in the negative, in favor of the assessee and against the revenue.

The reference was answered accordingly with no order as to costs.