1989 (1) TMI 362 - HC - VAT and Sales Tax

Summary

Issues:
1. Inclusion of freight in taxable turnover under U. P. Sales Tax Act, 1948.

Analysis:
The judgment by the High Court of Allahabad dealt with two sets of petitions concerning the inclusion of freight in the taxable turnover of coal traders for consecutive assessment years. The petitioners argued that they did not pay or charge freight, as it was directly paid by the allotees. The assessing officer issued notices under Section 21 of the Act based on conflicting judgments regarding the inclusion of freight in turnover.

The petitioners contended that since freight was not paid by them and was directly paid by the allotees, it should not be included in their turnover. The court referenced the case law, including M/s Vinod Coal Syndicate v. Commissioner of Sales Tax, U. P., Lucknow, to support the argument that if freight is separately charged and not included in the bill, it should not be part of the turnover. The court highlighted that the petitioners only raised bills for the ex-colliery price, taxes, and handling charges, as per the U. P. Coal Control Order.

The court rejected the standing counsel's reliance on various authorities, emphasizing that in this case, the expenditure on freight was borne by the allotees, not the petitioners. The judgment concluded that unless freight was charged in the bill demanding the sale price, it should not be included in the turnover of the coal traders. Consequently, the court allowed both sets of petitions, quashing the notices and directing the respondents not to pursue the assessment proceedings against the petitioners.

In summary, the judgment clarified that the inclusion of freight in the taxable turnover depends on whether it was directly paid by the allotees or charged separately in the bill. Since the petitioners did not charge freight and it was paid by the allotees, the court ruled in favor of the petitioners, quashing the notices issued under Section 21 of the Act and halting the assessment proceedings.