1997 (8) TMI 469 - HC - VAT and Sales Tax

Summary

Issues:
Whether payments made for specific charity by customers form part of consideration for sale of goods under Central Sales Tax Act.

Analysis:
The case involved two appeals concerning the exclusion of specific charity payments from the turnover of a company for assessment year 1979-80. The company collected amounts for a charitable institution from customers and claimed they were not part of trading receipts. The assessing officer rejected the claim, but the Appellate Assistant Commissioner allowed it, citing a Supreme Court judgment. However, the Commissioner of Commercial Taxes revised the decision, stating that the charity amounts formed part of consideration for sale as per the Central Sales Tax Act definitions.

The counsel for the assessee argued that the Supreme Court's decision impliedly overruled the earlier High Court decision and that the definitions of turnover in different Acts were crucial. The Supreme Court judgment in another case clarified that amounts collected for charity were not part of income and could not be considered as part of the price of goods purchased. The court distinguished between turnover for sales tax and income tax purposes, emphasizing that charity contributions were not taxable income.

The High Court referred to a previous case where amounts collected for charity were considered part of turnover. The court held that the charity payments collected by the company were indeed part of the sale price and consideration for goods sold. The definitions in the Central Sales Tax Act supported this interpretation, and the earlier High Court decision was still valid and not overruled. Therefore, the court upheld the Commissioner's decision, dismissing the appeals without costs.