1990 (10) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover for a private limited company selling liquor packed in cardboard cartons and claiming exemption for the value of cartons separately charged in the invoices.

Analysis:
The judgment pertains to a private limited company engaged in selling Indian-made foreign liquor packed in cardboard cartons. The company sought exemption for the value of the cartons separately charged in the invoices, contending that as the cartons were purchased locally with single point tax, they should not be included in the taxable turnover. The assessing authority, first appellate authority, and Sales Tax Appellate Tribunal upheld the inclusion of carton value in the turnover, leading to the company filing revisions.

The company argued that the cartons had a commercial identity of their own, purchased locally with single point tax, and hence should be exempt from taxation. However, the Revenue contended that the cartons were an integral part of the goods sold, and as per the Act, charges for delivery should be included in the turnover. The Tribunal agreed with the Revenue, stating that the value of cartons cannot be considered charges for delivery and upheld the tax levied on the carton value.

The High Court, after considering the arguments, held that the value of the cartons should be included in the turnover as they were part of the goods sold. The Court emphasized that the cartons formed an essential part of the packed article sold, which included liquor bottles and cartons. Therefore, the exemption claimed by the company for the carton value was not valid. The Court found no error in the Tribunal's decision and upheld the tax levied on the carton value at the rate applicable to the goods sold.

Additionally, the Court noted that the statutory provisions cited by the company were different from the current case, and the relevant provisions were not considered in those cases. Ultimately, the Court concluded that the tax revision cases lacked merit and dismissed the petitions.

In summary, the High Court upheld the inclusion of the value of cardboard cartons in the taxable turnover of the private limited company selling liquor, rejecting the company's claim for exemption based on the separate invoicing of carton value. The Court affirmed the Tribunal's decision and dismissed the tax revision cases for lacking merit.