9911796707
TMI Blog1997 (1) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... The next controversy relates to the rate of tax on cinder ash. 6.. The assessing authority in its order dated January 31, 1981 held that the tax is payable on the railway freight also and disallowed the claim of the assessee-respondent that it was not liable to tax. The assessing authority has assessed cinder ash as unclassified and imposed tax at 8 per cent. 7.. Feeling aggrieved, the respondent preferred appeal which was allowed in part vide order, dated March 16, 1983. It was held by the appellate authority that the amount of freight amounting to Rs. 6,15,334 should not be included in the taxable turnover of the assessee. It was further held that the finding of the assessing authority on cinder ash was not being disturbed. Feeling ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail, notwithstanding any terms or conditions of the contract to the contrary. The conclusion is, therefore, inevitable that the amount of freight forms part of the "sale price" within the meaning of the first part of the definition. 10.. Para 9 (page 30 of STC) of the aforesaid judgment, which deals with the cases not covered by the control order but only by the agreement, is reproduced as follows: "This would plainly and indubitably be the position where the contract of sale entered into by the dealer is f.o.r. destination railway station. But here it is necessary to bear in mind a rather important distinction. There may be a case where the contract of sale may not be f.o.r. destination railway station, but the price alone may be so. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing freight would not form part of the sale price if the freight was payable by the purchaser. 11.. In the present case, there is no control order which fixes the responsibility on the producer for payment of freight. On the contrary, the supply has been made according to the terms of the contract between the parties to the sale. The Deputy Commissioner, Sales Tax, referred to some portion of para 9 of the aforesaid decision and the agreement between the parties to the sale and held that no tax is payable on the freight and it is not part of the price. He referred to the dealership agreement according to which the sale was not f.o.r. destination but it was a f.o.r. price destination. It was further held that the freight is charged in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount for which the bill has been raised. 14.. On the facts mentioned above, this Court has held in the case between the parties, in Commissioner of Sales Tax v. Modi Industries 1989 UPTC 57 that the freight paid by the producer would not be included in its turnover. The following observation was made therein: "The fourth submission made by the learned Standing Counsel is that the Tribunal is in error in deleting the amount of Rs. 4,17,308 on account of railway freight. The Tribunal has found as a fact that the assessee had given a discount of freight and had not realised the said amount from the customers. Admittedly the said discount is an allowable deduction under rule 44 of the U.P. Sales Tax Rules framed under the Act. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany and the purchasers cannot on that account be altered. The company may be liable to refund the amount of excess sales tax to its purchasers. But that is a matter between the company and the purchasers and the State cannot seek to levy tax on railway freight if it is not made a part of the price." 17.. The Tribunal below gave several opportunities to the Commissioner, Sales Tax, to produce Vanaspati Control Order, if any, for the period in question. No control order was produced and even today it is not asserted that the price of the vanaspati is regulated by any control order which has any overriding effect as in the case of Hindustan Sugar Mills [1979] 43 STC 13 (SC); 1979 UPTC 37. I feel that the present case is squarely covered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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