9911796707
|
Home
Issues Involved:
1. Inclusion of packing and handling charges in the sale price. 2. Levy of purchase tax for contravention of declarations in Form 19. 3. Levy of purchase tax on timber used for packing. 4. Imposition of penalties under sections 45(1) and 45(6) of the Gujarat Sales Tax Act, 1969. Issue-Wise Detailed Analysis: 1. Inclusion of Packing and Handling Charges in the Sale Price: The appellant contended that the packing materials separately shown in the White Bills and separately recovered through Yellow Bills are charges recovered from the purchasers after the sale of goods was completed. The appellant argued that these charges should not form part of the sale price. The Tribunal, however, found that the packing charges shown in the White Bills were in respect of special packing at the specific request of the buyers and were charged before the goods were ready for delivery ex-factory. Thus, these packing charges form a part of the sale price as they were charged for and recovered before the goods were ready for delivery ex-factory. The Tribunal relied on the Supreme Court decision in Mcdowell & Co. Ltd. vs. CTO, which interpreted "any sum charged by a dealer" to mean what is demanded and collected or received by the dealer. The Tribunal also held that the charges recovered through the Yellow Bills for handling, loading, unloading, and delivery at the destination also form a part of the sale price, as the substance of the contract was that the appellant was under an obligation to deliver the goods at the purchaser's destination. 2. Levy of Purchase Tax for Contravention of Declarations in Form 19: The STO held that the appellant was not entitled to purchase goods used in the manufacture of glass sent to branches on consignment basis against declarations in Form 19, leading to a contravention of the conditions prescribed in Form 19. Consequently, the STO levied a purchase tax of Rs. 95,925 under section 16 of the Act. The Tribunal found that the method adopted by the STO to work out the ratio of consignment sales to total sales and apply the same ratio to the purchases made against Form 19 was reasonable. Therefore, the levy of purchase tax of Rs. 95,925 was justified. 3. Levy of Purchase Tax on Timber Used for Packing: The STO levied a purchase tax of Rs. 7,470 on the purchases of timber used to prepare crates for packing glass, as the packing material is a prohibited item under Form 19. The Tribunal held that the process of manufacture is over once the manufactured article is ready, and packing materials cannot be considered as consumable stores used in the manufacture. Hence, the levy of purchase tax on the purchases of timber was proper. 4. Imposition of Penalties Under Sections 45(1) and 45(6) of the Gujarat Sales Tax Act, 1969: The STO imposed a penalty of Rs. 10,000 under section 45(1) for the contravention of declarations in Form 19 and a penalty of Rs. 45,592 under section 45(6) because the difference between the amount of tax assessed and the amount of tax paid exceeded 20 percent of the tax paid before assessment. The Tribunal reduced the penalty under section 45(1) from Rs. 10,000 to Rs. 5,000, considering the reasonable doubt in the minds of the Departmental Authorities until the Tribunal rendered its decision in the case of Prabhat Solvant Extraction Industries (P) Ltd. The Tribunal also reduced the penalty under section 45(6) from Rs. 45,592 to Rs. 14,000, considering that the judgment in the case of Prabhat Solvant Extraction Industries (P) Ltd. was rendered on 30th Jan., 1975, and the assessment proceedings were completed by passing an order of assessment on 10th Dec., 1975. Conclusion: The appeal was substantially dismissed, with the order passed by the learned Asstt. CST being confirmed except for the penalties under sections 45(1) and 45(6) of the Act, which were reduced to Rs. 5,000 and Rs. 14,000, respectively. The assessment order was modified accordingly, and any excess amounts of penalties paid were to be refunded to the appellant.
|
