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TMI Blog1999 (8) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-88 in the original assessment. 2.. The facts leading to the present revisions in respect of the disputed items are as follows: The assessee claimed that cylinders are loaned to the customers for use of the gases contained in them and that there is no sale of cylinders. The cylinders must be returned as and when they became empty and that charges have been collected having regard to the retention time of the cylinders with the customers. Thus, the charges collected are not to be considered as consideration for sale of either gas cylinders or gas. Similarly, for the lost cylinders, the amount collected is only the replacement value and therefore such amount collected will not form part of the transaction. However, the assessing authority held that the amount collected as cylinder holding charges is to be assessed to tax under section 3-A of the Tamil Nadu General Sales Tax Act, 1959 at 4 per cent and that the cost of cylinder collected from the customer for loss of cylinder is to be assessed at 10 per cent. The petitioner preferred appeal before the Deputy Commissioner of Commercial Taxes, Madras North, the appellate authority, against the orders passed by the Assistant Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct rate of tax at 5 per cent, the matter is remanded back to the assessing authority to work out the correct taxable turnover as per books before making assessment. Thus, the remand order of the first appellate authority was approved except for the reduced rate of tax at 5 per cent. As regards cylinder holding charges, the Sales Tax Appellate Tribunal referred to the collection of cylinder holding charges in addition to cylinder deposits collected by the appellant. Considering the fact that the cylinder holding charges have been collected invariably in all cases and that the collection was in addition to cylinder deposit collected separately, the Sales Tax Appellate Tribunal held that the view of the first appellate authority that the turnover is not to be assessed under section 3-A of the Act for the transfer of right to use the cylinders is correct and that the turnover is to be assessed to tax at 10 per cent only on the ground that the cylinder cannot put to use by the customer except for the use of gas therein and that the collection of a separate charges in the name of cylinder holding charge is nothing but to claim exemption on the price of the charges. Thus, the Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and their fittings and in case of non-return, loss or damage, full replacement value will be charged at the company's prevailing rates. Cylinder holding charge in respect of cylinders retained in the custody of the customers will be payable till replacement value is paid. 5.3. A cylinder holding charge in respect of the cylinders of which the custody is permitted to be retained by the customer will be payable by the customer from the date of delivery/despatch of full cylinders from the company's works/depots/warehouses till the date of physical receipt of empty cylinders at the company's works/depots/ warehouses from where supplies were made. If these are returned to some other works/depots/warehouse charges incurred in transporting these to the place from where supply was originally made are payable by the customer. The customer will be required to pay the cylinder holding charge on the basis of total number of cylinders held by the customer and the duration of such holding. As and when supply of full cylinders is made and/or empty cylinders are received, the company will submit bills for the cylinder holding charge and these should be paid along with the value of gas supplied. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner whatsoever but merely to retain them in their custody for the purpose of using the gas contained in them. Further, the collection of cylinder holding charge depends on the duration of the usage of the cylinder by the customers. Thus, apparently, there is no consideration for the supply of cylinders for use of gas contained therein. There is no change in the price charge for gases whether supplied in company owned cylinders or in the cylinders owned by the customers. In such circumstances, there is absolutely no case to include the cylinder holding charges along with the gas turnover so as to assess at 10 per cent as held by the Sales Tax Appellate Tribunal. In [1989] 72 STC 118, in the case of Collector of Central Excise, Madras v. Indian Oxygen Limited "the assessee in the present case" the Supreme Court has considered the levy of Central excise duty on cylinder rentals collected by the assessee. The Supreme Court categorically held that the excise levy was on the manufacture of goods it is chargeable with reference to the price at which the goods are ordinarily sold. The Supreme Court categorically held that there were two different supplies-one is supply of gases and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal on the question of law raised or pass such order in relation to the matter as the Special Tribunal thinks fit. If the order of the Sales Tax Appellate Tribunal is reversed, then the petitioner has to get relief and the matter before the Special Tribunal is whether the gas cylinder holding charges on which tax was upheld by the Sales Tax Appellate Tribunal at 10 per cent under section 3(2) of the Act is correct or not. The matter in dispute does not relate to the question whether such turnover is assessable under section 3-A of the Act. In this connection, Mr. N. Sriprakash referred to the definition of "matter" as found in Blacks Law Dictionary which reads as follows: "Matter: Substantial facts forming basis of claim or defence; facts material to issue; substance as distinguished from form; transaction, event, occurrence; subject-matter of controversy, See issue; material fact; matter in issue; subject-matter. Matter in controversy or in dispute: Subject of litigation; matter on which action is brought and issue is joined and in relation to which, if issue be one of fact, testimony is taken. Golden v. Sixth Judicial Dist. Ct. in and for Pershing County, 57 Nev. 114, 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the decision of this Special Tribunal, reported in [1999] 113 STC 403 at page 425 (Upasana Finance Ltd. v. State of Tamil Nadu), the cylinder retention charges are taxable turnover. As rightly held by the appellate authorities, having regard to the fact that gas cylinder is for use of gases only, the turnover has to be brought to be taxed at 10 per cent under section 3(2) of the Act. Further, the remand order of the Appellate Tribunal is quite in order and the directions given therein are also in order. 9.. We have considered the rival contentions. In the terms and conditions pertaining to the transaction cited by the learned counsel for the petitioner, it has been clearly classified under the heading "price" that when gas is supplied in company owned cylinders, a cylinder holding charge in respect of cylinders retained in the custody of the customer and repair charges, if applicable, will be levied. Thus, it is quite clear that both the appellant and the customers clearly understood that the amount paid towards cylinder holding charges represented price consideration. The point for decision is whether such a price is to be taxed as value of gas or value of cylinders. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the assessee has collected the cylinder holding charges, we quite agree with the contention of the learned counsel for the petitioner that the transactions involved two different supplies and the decision of the Supreme Court in Collector of Central Excise, Madras v. Indian Oxygen Limited [1989] 72 STC 118 squarely applies to the present case also. As rightly held by the Supreme Court this is a case of two different supplies. One is supply of gases and the other is incidental supply of cylinders for rent. Therefore, the Sales Tax Appellate Tribunal is not right in holding that the sale is an indivisible contract and therefore the entire turnover is to be assessed to tax at the rate of tax applicable to the commodity namely gas. Thus, we hold that the cylinder holding charges collected by the appellant in this case are nothing but hire charges and that the hire charges are liable to tax under section 3-A of the Tamil Nadu General Sales Tax Act, 1959 following the ratio of the decision of this Special Tribunal in the case of Upasana Finance Ltd. v. State of Tamil Nadu [1999] 113 STC 403. 11.. As regards the next point that the Special Tribunal in the revision under section 38 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in revision under section 41 of the Kerala General Sales Tax Act, 1963. 13. In the case of Raja Agencies v. State of Andhra Pradesh [1983] 53 STC 238 (AP), in the revision, argument was advanced that "Robin Blue" is a colour and it falls within entry 45 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. It was found that this question was not raised before any of the departmental authorities or the Tribunal. Only in such circumstances, it was held that the alternative contention raised before the High Court was not at all raised before the Tribunal and therefore it cannot be held that the Tribunal has failed to decide that question. The observations in AIR 1971 SC 2355 in the case of Mathura Prasad Sarjoo Jaiswal v. Dossibai N.B. Jeejeebhoy related to jurisdiction of court in the contest of res judicata. Only in that context, it was stated that a pure question of law unrelated to facts which give rise to right cannot be deemed to be a matter in issue. 14. In the present case before us, the assessing authority held that the cylinder holding charges are assessable to tax under section 3-A of the Tamil Nadu General Sales Tax Act, 1959. The first appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the incidental supply of cylinders involved in the supply of gas is to be brought to tax. However, as held by us, this turnover of cylinder holding charges, on the totality of the circumstances of the case having regard to the terms and conditions of the contract, have to be assessed to tax under section 3-A of the Tamil Nadu General Sales Tax Act, 1959 pertaining to levy of tax on right to use any goods. Further, section 38(4)(a) of the Act clearly says that the Special Tribunal is competent to pass such order in relation to the matter as the Special Tribunal thinks fit. Therefore, the matter before us related not only to a decision as to the determination whether the Sales Tax Appellate Tribunal has rightly decided that cylinder holding charges are assessable turnover and in the event of finding in the affirmative, this Special Tribunal has to consider and decide whether the rate of tax at 10 per cent levied under section 3(2) of the Act is in order. When we have held that the cylinder holding charges are rightly held as taxable turnover, naturally we have to decide whether it is assessable to tax at 10 per cent or otherwise. When we have held on considering the totality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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