1995 (7) TMI 389 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of "sale price" under the Central Sales Tax Act in relation to transportation and insurance charges.

Analysis:
The judgment pertains to a revision under section 38 of the Tamil Nadu General Sales Tax Act, 1959, concerning the inclusion of transportation and insurance charges in the "sale price" for an inter-State sale under the Central Sales Tax Act, 1956 for the assessment year 1983-84. The primary issue is whether the transportation charges of Rs. 2,00,000 and insurance charges of Rs. 20,000 are part of the sale price as defined under section 2(h) of the Central Sales Tax Act.

The petitioner contended that the transportation and insurance charges should not be considered part of the sale price based on the purchase order terms. However, the Court noted that the purchase order clearly stated the total price for the crane, including transportation and insurance charges, as Rs. 21,63,675. The Court emphasized that the parties intended the total price to cover all aspects of supply, including transportation and insurance, thus supporting the authorities' conclusion that these charges form part of the sale price.

Additionally, the Court highlighted that the erection charges were also treated as part of the sale price, further reinforcing the inclusion of transportation and insurance charges. Referring to the case law, the Court reiterated that the consideration passing from the purchaser to the dealer determines the sale price, irrespective of the components of the consideration. The Court emphasized that the actual amount payable for the sale is crucial, not the net amount retained by the dealer.

In conclusion, the Court dismissed the revision, upholding the inclusion of transportation and insurance charges in the sale price based on the purchase order terms and the legal interpretation of the term "sale price" under the Central Sales Tax Act. The petitioner's argument was deemed without merit, and the revision was dismissed with costs.