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TMI Blog1997 (4) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded in the turnover conceded by the petitioner. The petitioner filed reply to the reassessment notice objecting to the proposal. The assessing authority rejected the same and revised the assessment for 1988-89 by assessing an escaped turnover of Rs. 2,59,200 and raised an additional demand of Rs. 2,074. This was arrived at on the basis that the sale value of cement per bag was Rs. 72.75 as against the sale value conceded by the petitioner at Rs. 62.73. Aggrieved by the reassessment order the petitioner took up the matter in appeal before the Appellate Assistant Commissioner, Agricultural Income-tax and Sales Tax, Alappuzha, who by his order dated July 13, 1993 dismissed the said appeal. In second appeal by the petitioner, the Sales Tax Appellate Tribunal confirmed the said order. It is against this order of the Sales Tax Appellate Tribunal the petitioner has come up in revision. 3.. The learned counsel appearing for the petitioner submitted that there is no question of any under-valuation in this case. He submitted that the petitioner had not collected any amount in excess of what is shown in the accounts and that there is absolutely no evidence to establish that the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel also relied on certain observations of the Supreme Court in Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu [1993] 88 STC 151. 4.. Learned Special Government Pleader appearing for the respondent submitted that in the instant case the petitioner had purchased cement from factories outside the State by issuing "C" form and that as per the conditions of the contract of sale, freight and transportation charges had to be paid by the petitioner since what was charged by the factories in the sale bill was only the value of cement, excise duty and the Central sales tax and therefore the petitioner was liable to pay the freight, transportation and loading and unloading charges and that in the instant case the petitioner has not shown such expenses incurred by him in the accounts maintained by him. Petitioner had also not included the freight, loading and unloading charges in the bill issued to the various customers. He also submitted that on enquiry with other dealers in the locality, it was found that they have conceded sales of cement at the rate of Rs. 73 or Rs. 72.75 per bag. He further submitted that even if freight, loading and unloading charges were paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax including the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India." The words "taxable turnover" are defined in section 2(xxv) of the Act, which reads as follows: "(xxv) 'taxable turnover' means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into territory of India." 7.. Rule 9 of the Kerala General Sales Tax Rules, 1963 provides for various deductions to be made for arriving at the taxable turnover. The relevant portion reads as follows: "9. Determination of taxable turnover.-In determining the taxable turnover, the amounts specified in the following clauses shall subject to the conditions specified therein, be ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue notice to a dealer, in cases where whole or any part of the turnover of business of a dealer has escaped assessment to tax in any year or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable or any deduction has been wrongly made therefrom, proposing to reopen the assessment already completed. The reopening can be for any reason. The only inhibition is that the notice under section 19 must be issued within four years from the expiry of the year to which the tax relates and the further condition is that before making an assessment under the said provision the dealer must be given a reasonable opportunity of being heard. In the instant case the assessment has been completed without taking into consideration the freight charges paid. 10.. The assessing authority has noted that the price shown in the despatch note issued by the factory is the cost of cement excluding the freight, loading and unloading charges, etc., and therefore freight and loading and unloading charges will form part of the purchase price of the dealer and if the transporting charges were paid by the customers of the petitioner such payment was only on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only on behalf of the petitioner. 12.. As already stated, even assuming that such payments were made by the customers pursuant to any arrangement made between the petitioner and the customers, since the payment of freight, etc., relates to a transaction prior to the sale of the same goods to the customers, those charges can only be part of the purchase price of the petitioner. Considering the matter from all angles, it cannot be said that the petitioner was not liable to include freight, etc., paid on the purchase of 146 loads of cement from factories at Madras and transported to the petitioner's premises. We are also of the opinion that the reliance placed on the decisions of this Court and the Supreme Court have no application to the facts of this case. The decision of this Court in C.O. Devassy v. State of Kerala [1991] 81 STC 2 relates to undervaluation of purchase price with a view to evade payment of tax and the invocation of the provisions of section 19B of the Act. It is true that this Court had held that the vital fact necessary for making the assessments on best judgment basis by invoking section 19B of the Act is to establish that the assessee factually collected more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny does not accept any liability for any delay, shortage, damage or loss of goods in transit. Claim should be lodged with the carriers by the buyers directly. In respect of any claim for overcharge of freight, the purchaser shall put up claim with the concerned railway authorities. The appellant in fulfilment of these contracts, despatched cement to the purchasers at various destinations by rail and the railway receipts were made out on the basis of "freight to pay". The invoices sent by the assessee showed the "free on rail destination railway station" price of the cement despatched at the rate of Rs. 214.65 per metric tonne and added the amounts representing excise duty and packing charges and deducted the amount of railway freight since it was to be paid by the purchasers. The appellant did not charge in the invoices sales tax on the amount of railway freight, since in its view it did not form part of the "sale price", but in order to provide against a possible claim which might be made by the sales tax authorities, the assessee claimed by way of deposit an amount "towards contingent liability to sales tax on railway freight to be paid by you", that is, the purchasers. It is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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