1992 (6) TMI 178 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover under Central Sales Tax Act, 1956 - Exemption on freight charges - Revisional power of Joint Commissioner - Entitlement to exemption under section 2(h) of the Central Sales Tax Act, 1956.

Analysis:
The appellant was assessed on a total and taxable turnover for the assessment year 1973-74 under the Central Sales Tax Act, 1956. The assessing officer allowed exemption on a turnover relating to freight charges, but the Joint Commissioner of Commercial Taxes, through revisional power, brought the turnover into the net of taxation on the ground that freight charges cannot be exempt from tax based on the circumstances of the case.

The appellant's counsel initially argued that the Joint Commissioner should not have altered the assessing authority's order since the matter was under appeal before the Appellate Assistant Commissioner. However, it was clarified that the appeal was against different disputed turnover, not the turnover in question. The appellant contended that they were entitled to exemption under section 2(h) of the Central Sales Tax Act, 1956, as the exemption claimed fell within the Act's provisions. The appellant also argued that the revisional authority did not provide a finding when exercising its power, especially when bringing previously exempted turnover under taxation.

Upon thorough consideration, the Court disagreed with the appellant's arguments. It was observed that the appellant did not present price lists or invoices for other goods, and it was not proven that freight charges were separately shown in invoices. The Court noted that the appellant collected taxes on freight charges included in an all-inclusive price, making the freight part of the sale price and subject to tax. Referring to a similar case under the Tamil Nadu General Sales Tax Act, the Court cited a Supreme Court decision emphasizing that to claim exemption, freight must be separately specified and charged for, not included in the goods' prices, a condition not met in the present case.

Based on the Supreme Court's decision, the Court concluded that the appellant was not entitled to the claimed exemption. The Joint Commissioner's revisional order was upheld, and the tax case was dismissed with no costs incurred by either party.