1995 (12) TMI 405 - HC - VAT and Sales Tax

Summary

Issues: Validity of order rejecting books of accounts and enhancing turnover; Inclusion of amount spent on insuring goods in turnover.

Validity of order rejecting books of accounts and enhancing turnover:
The judgment pertains to a revision petition under Section 11 of the U.P. Sales Tax Act challenging the Sales Tax Tribunal's order dismissing the dealer's second appeal for the assessment year 1988-89. The primary issue raised was the rejection of the dealer's books of accounts and the subsequent enhancement of turnover. The dealer, a manufacturer of asbestos cement sheets, had its books rejected due to a truck not carrying Form XXXI, resulting in a penalty under Section 15-A (1) (o). However, a previous judgment by the same judge allowed an appeal against the penalty, deeming the default accidental with no tax evasion intent. Consequently, the basis for rejecting the books of accounts was invalidated, leading to the acceptance of the returned turnover.

Inclusion of amount spent on insuring goods in turnover:
Another point of contention was the inclusion of the amount spent by the dealer on insuring goods dispatched to customers in the turnover. The dealer argued that the insurance charges, totaling &8377; 72,928, were incurred at the buyer's request and should not be considered part of the sale price. Supporting documents, including agreements and terms, demonstrated that the choice to insure goods lay with the stockist or buyer, with delivery completed upon handing over goods to the transporter. The insurance charges, recovered from customers, were not received as part of the goods' price but as a reimbursement for expenses incurred on behalf of the customer. The judgment ruled in favor of the dealer, stating that the insurance charges were not liable for inclusion in the turnover.

In conclusion, the revision petition was allowed, and the additions to the turnover were deleted. The dealer was awarded costs for the petition, assessed at &8377; 1500. Additionally, a certified copy of the order was directed to be sent to the Tribunal as per Section 11(8) of the U.P. Sales Tax Act.