1983 (8) TMI 247 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the transport charges incurred by the appellant can be deducted under rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959?
- Whether there are two distinct and separate contracts between the appellant and the buyers of blue-metal, justifying the deduction of transport charges?
- Whether the appellant is entitled to a deduction of transport charges of Rs. 2,13,454?

Analysis:

Issue 1: The first issue revolves around whether the transport charges incurred by the appellant are eligible for deduction under rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959. The assessing authority initially negated the claim for deduction, stating that the sale price included transport charges incurred prior to the sale. However, the Appellate Assistant Commissioner allowed the deduction after considering evidence of a separate agreement for transport charges. The High Court examined the terms of the contracts between the appellant and its customers, finding that in cases where delivery was ex-quarry, no transport charges were included. Conversely, when delivery was at the site, transport charges were separately indicated in the bill. The court concluded that the appellant satisfied the requirements of rule 6(c)(i) and was entitled to the deduction of transport charges.

Issue 2: The second issue pertains to whether there are two distinct and separate contracts between the appellant and the buyers of blue-metal, justifying the deduction of transport charges. The Board of Revenue contended that there was a consolidated contract for the supply of blue-metal at the site, inclusive of transport charges. The appellant argued that there were two separate bargains, one for the supply of blue-metal and another for transport charges, supported by affidavits and billing practices. The court analyzed the invoices and bills provided by the appellant, determining that separate agreements for blue-metal supply and transport charges existed in transactions where delivery was at the site. This finding supported the appellant's claim for a deduction of transport charges.

Issue 3: The final issue addresses the appellant's entitlement to a deduction of transport charges amounting to Rs. 2,13,454. The court, after considering the evidence and contractual terms, held that the appellant had valid grounds for claiming the deduction. The court referenced previous judgments and distinguished the present case based on the presence of separate agreements for blue-metal supply and transport charges. Consequently, the court allowed the appeal, set aside the Board's order, and restored the decision of the Appellate Assistant Commissioner, granting the appellant the deduction of transport charges.

In conclusion, the High Court ruled in favor of the appellant, allowing the deduction of transport charges under rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959. The court found that the appellant had established the existence of separate agreements for the supply of blue-metal and transport charges in transactions where delivery was at the site, justifying the deduction of Rs. 2,13,454.