2004 (10) TMI 598 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of distribution charges in taxable turnover for Assessment Year 1984-85 under U.P. Sales Tax Act.

Analysis:
The case involves a revision under Section 11 of the U.P. Sales Tax Act challenging the inclusion of distribution charges in the taxable turnover for the Assessment Year 1984-85. The main question raised was whether the Tribunal was legally justified in including the distribution charges in the applicant's turnover. The applicant, engaged in the business of Vanaspati Ghee, argued that the distribution charges were for freight, insurance, forwarding, and maintenance of Depot, and thus should not be part of the turnover. However, the Assessing Authority, First Appellate Authority, and Tribunal all upheld the inclusion of distribution charges in the turnover.

The applicant cited previous judgments related to Assessment Years 1982-83 and 1983-84, where it was held that certain charges should be excluded from turnover if separately billed. The Standing Counsel argued that under the Vanaspati Price Control Order, the distribution charges were part of the turnover, as the price was fixed FOR destination. The First Appellate Authority found that the distribution charges were distinct from freight charges and were included in the turnover. The Court examined the orders of the authorities below and found that the distribution charges were in line with the Vanaspati Price Control Order, justifying their inclusion in the turnover.

The Court referred to previous judgments where it was held that charges like insurance, forwarding, depot maintenance, and sale promotion should be part of the turnover. It was emphasized that if the price was fixed FOR destination, charges related to freight or delivery must be considered part of the turnover. The Court found no error in the Tribunal's order, as the distribution charges were in accordance with the Vanaspati Price Control Order and were not separately charged. Ultimately, the revision was dismissed, upholding the inclusion of distribution charges in the taxable turnover for the Assessment Year 1984-85 under the U.P. Sales Tax Act.