2019 (7) TMI 1400 - HC - VAT and Sales Tax

Valuation - inclusion of freight charges in assessable value - whether the freight charges paid by the assessee to bring the goods to his place of business, is to be included in his turnover? - HELD THAT - Perusal of the order of the Tribunal reveals that the claim of the sale by endorsement could not be established by the assessee by any documentary evidence. The documentation relied upon by the assessee was only to the effect of intimation made by the assessee to the railway authorities of the manner in which the coal supplied had been dealt with. As to the claim of commission agency, also no evidence could be led to establish its existence. In any case, since the pleas were allowed to be taken by this Court, at present what survives for consideration is whether the findings recorded by the Tribunal suffer from any error of law - both findings recorded by the Tribunal are based on appraisal of evidence and material on record. The assessee could not establish either that it had performed the sale in transit by endorsement or that it had acted as a commission agent. revision dismissed.

Summary

Issues:
1. Inclusion of freight charges in the turnover of the assessee.
2. Whether the assessee conducted a sale in transit by endorsement or acted as a commission agent.

Analysis:
1. The revision was filed against the Trade Tax Tribunal's order dismissing the appeal by the assessee regarding the inclusion of freight charges in turnover. The assessee claimed that since the freight charges were paid by the coal depot holders and not by the assessee, they should not be included in turnover. The Tribunal allowed the appeal, stating that if the coal was sold by endorsement of bilties in favor of brick kiln owners and they took delivery from the railway, freight would not be part of turnover. The High Court remanded the matter to the Tribunal to determine if there was a sale in transit and if the assessee acted as a commission agent.

2. The Tribunal found that the claim of sale by endorsement or acting as a commission agent could not be substantiated by the assessee with documentary evidence. The High Court noted that these claims were mutually exclusive and the assessee should not have been allowed to take both. The Tribunal's findings were based on evidence and material on record, and the High Court upheld these findings as consistent with the law laid down by the Supreme Court.

3. The High Court rejected the new plea raised by the assessee that the sale was completed during transit when the goods were loaded on railway rakes. The Court found this plea to lack merit and dismissed the revision, affirming the Tribunal's decision to include the freight charges in the turnover of the assessee.