1988 (6) TMI 302 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of pre-sale expenses in turnover for taxation purposes.
2. Maintaining separate accounts for pre-sale and post-sale expenses.
3. Rejection of petitioner's contention regarding expenses by assessing authority, first appellate authority, and Tribunal.
4. Lack of material to support petitioner's objection on expenses.
5. New plea raised by petitioner's counsel not considered due to lack of factual basis.

Analysis:

The petitioner, a dealer in gingili seeds, filed a return for the assessment year 1981-82, declaring the turnover including the value of the seeds purchased. The assessing authority proposed to include additional expenses related to the purchase of seeds in the turnover, considering them as pre-sale expenses. The petitioner argued that these expenses, such as weighment charges and packing costs, were post-sale expenses and should not be included. However, the assessing authority, first appellate authority, and Tribunal rejected the petitioner's contention, emphasizing the lack of separate accounts for pre and post-purchase expenses.

The petitioner's counsel contended that unless the expenses were included in the seller's bill or directly charged by the seller, they should not be considered part of the turnover. However, the Court noted that the petitioner did not raise these specific grounds before the lower authorities, leading to the rejection of the objection. The Court highlighted the importance of maintaining proper accounts to distinguish between pre-sale and post-sale expenses, which the petitioner failed to do in this case.

Ultimately, the Court dismissed the tax revision case, upholding the Tribunal's decision to include the expenses in the turnover due to the lack of supporting material or proper accounts maintained by the petitioner. The Court emphasized that the new arguments raised by the petitioner's counsel could not be entertained without a factual basis. Consequently, the petition was dismissed without costs, affirming the decision of the lower authorities regarding the taxation treatment of the expenses related to the purchase of gingili seeds.