2016 (2) TMI 1254 - SC - VAT / Sales Tax

Valuation - Wages received to be treated as a facility charges - Includibility in the sale price - Bengal Finance (Sales Tax) Act, 1941 - HELD THAT - The first part of Section 2(h) of the 1941 Act defined sale price , with which we are presently concerned, as well as the first part of Section 2(d) of the 1954 Act as also the first part of Section 2(p) of the Rajasthan Act, 1954 are similar. Reliance placed in the case of HINDUSTAN SUGAR MILLS LTD. VERSUS STATE OF RAJASTHAN JK. SYNTHETICS LTD. VERSUS COMMERCIAL TAX OFFICER, KOTA 1978 (8) TMI 186 - SUPREME COURT where it was held that The amount of freight forms part of the sale price within the meaning of the first part of the definition and it is not necessary for the State to invoke the inclusive clause and in fact the State has not done so. The exclusion clause is, therefore, irrelevant and cannot be called in aid by the assessee. Appeal dismissed.

Summary

Issues:
Interpretation of the term "sale price" under the Bengal Finance (Sales Tax) Act, 1941 in relation to charges received for supply of industrial gases.

Analysis:
The case involved an appeal against a judgment disallowing the appellant's claim regarding charges received from a company for supplying industrial gases through a pipeline. The High Court upheld the decision of the West Bengal Taxation Tribunal, which denied the appellant's request to exclude these charges from the sale price under the Bengal Finance (Sales Tax) Act, 1941. The High Court referenced the definition of "sale price" in the Act and relied on a previous judgment in a similar matter.

The appellant attempted to distinguish the cited judgment, arguing that it pertained to a different Act with a distinct definition of "sale price." However, the Supreme Court noted that the relevant provisions in both Acts were similar and had been previously interpreted in a different case. The Court highlighted that the definition of "sale price" encompassed charges for activities related to goods before delivery, including freight costs, which were considered part of the sale price.

To clarify the legal principles, the Court referred to paragraphs from a previous judgment, emphasizing that charges for activities done by the dealer before delivery, such as freight costs, were to be included in the sale price unless separately charged. The exclusion clause in the definition of "sale price" did not apply if the state could demonstrate that the amount fell within the primary definition. The Court concluded that the appellant's case lacked merit based on the established legal precedents and upheld the decision of the High Court, dismissing the appeal without costs.