2019 (4) TMI 424 - HC - VAT and Sales Tax

Valuation - inclusion of freight charges in the assessable value - the amount of freight charges are shown separately in the invoice and the price of goods is not inclusive of freight charges - Rule 6 of TNGST Rules, 1959 - Held that - In terms of the Rule 6, freight and charges for delivery are not to be included in the total turnover rather to be deducted from the total turnover. Therefore, the Revenue is not right in contending that the assessee has to first include the same in the total turnover and then claim exemption. The expression used in Rule 6 is deducted . Therefore, in our understanding, the deduction should be prior to submission of the return. Admittedly, in the case on hand, the freight charges have been shown separately and this has been recognized by the Assessing Officer himself. However, the Assessing Officer proceeded to revise the assessment rejecting the contention of the assessee. The judicial discipline requires that the earlier order of the Tribunal is followed especially when it is in the assessee s own case and identical transaction. The Tribunal was wrong in allowing the appeal by the State and setting aside the order passed by the First Appellate Authority - tax case revision allowed.

Summary

Issues:
1. Appeal against the order of the Tamil Nadu Sales Tax Appellate Tribunal.
2. Misdirection by the Appellate Tribunal in allowing the State's appeal.
3. Failure to consider the factual findings regarding freight charges.
4. Inability to produce written agreement after a lapse of 15 years.
5. Interpretation of Rule 26(16) of the Tamil Nadu General Sales Tax Rules, 1959.
6. Exclusion of freight charges from the total turnover.
7. Binding effect of earlier Tribunal order on the current case.

Analysis:
1. The Tax Case Revision challenged the order of the Tamil Nadu Sales Tax Appellate Tribunal, focusing on substantial questions of law.
2. The first issue raised was the misdirection by the Appellate Tribunal in allowing the State's appeal, despite a previous favorable decision for the petitioner in a similar case.
3. The second issue highlighted the failure of the Appellate Tribunal to consider the factual findings regarding the separate invoicing of freight charges.
4. The inability of the petitioner to produce a written agreement after 15 years was also a point of contention, questioning its impact on the claim for deduction of freight charges.
5. Interpretation of Rule 26(16) of the Tamil Nadu General Sales Tax Rules, 1959, was crucial in determining the validity of the petitioner's claim for deduction.
6. The court emphasized the exclusion of freight charges from the total turnover, citing Rule 6 of the TNGST Rules, which specified deductions for certain charges when separately specified and charged by the dealer.
7. The judgment highlighted the binding effect of an earlier Tribunal order on the current case, emphasizing the need for consistency and judicial discipline in following precedent unless factually distinguishable.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's reasoning in addressing each point raised during the proceedings.