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TMI Blog1998 (2) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction of the Commercial Tax Officer, Royapuram assessment circle. 3.. The assessee-dealers reported a total and taxable turnover of Rs. 3,97,97,938.93 and Rs. 2,97,35,987.39 respectively as per the return in form-I for the assessment year 1986-87 under CSTA. Accounts were called for and checked by this assessing officer, before ever the order of assessment was made. In the process of checking accounts, the assessing officer found that the exemption claimed in respect of transport charges of Rs. 2,28,836 was not in order and hence disallowed the exemption so claimed. He further found that the levy of rate of tax at 10 per cent should be made instead of at four per cent on a turnover of Rs. 17,288 inasmuch as the assesseedealers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax at the appropriate rate and the penalty as reduced by AAC quantified in a sum of Rs. 13,730 and no challenge is made as respects the imposition of tax at 10 per cent on a turnover of Rs. 17,288. 7.. From the pith and substance of the submissions of Mr. N. Inbarajan, learned counsel appearing for the assessee and Mr. R. Ravi Raja Pandian, learned Special Government Pleader, representing the Revenue, the one and only question that crops up for consideration is as to whether the order of the Tribunal, on the facts and in the circumstances of the case, sustaining the order of AAC pertaining to the includibility of the transport charges in a sum of Rs. 2,28,836 in the taxable turnover exigible to tax at the appropriate rate and redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties, it is wellnigh not possible, in the absence of evidence aliunde, to determine the nature and character of the transaction entered into between the parties. 10.. In the case on hand, no doubt true it is, that no written contract or agreement between the parties is available, but nonetheless as had already been stated, from the purchase orders and the invoices, a lot of clue is there to determine the nature and character of the transaction entered into between the parties. For the sake of emphasis, we may reiterate and state that such documents reveal, in unmistakable terms, that the delivery of the goods was to be effected by the assessee-dealers to the buyer at his place and that apart, the transport charges had been paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yers at different ends under CSTA. (a) In the process of giving an answer to the tangle so posed, the apex Court projected two questions: 1.. Who, under the terms of the contract was liable to pay the freight, the assessee or the purchaser? and 2.. Was the contract one for delivery at destination railway station or was it a contract in which delivery to the purchaser would be complete as soon as the goods are put on rail at the place of despatch? (b) After posing the questions as above, the Supreme Court said, in the process of discussion, that if the contract was one for delivery at the destination railway station, risk continues to be that of the seller-dealer and consequently, the freight and insurance charges paid are includible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of overriding the contract between the parties, e.g., in the case of the sale of cement, a controlled commodity, the price of which is fixed per metric tonne by the Control Order at the place of destination railway station, the liability of freight and insurance charges is fixed on the part of the selling dealer. It is impermissible to enter into contract to make delivery complete by putting the goods, viz., cement in the loading railway station, thereby fastening risk upon the buyer in rather a bid to exclude the freight and insurance charges from the sale price exigible to tax. 13.. In the light of the principles, as evolved by the apex Court of this country, let us enter into the arena of discussion to give a legal fitment to the factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted or violated the salient provisions adumbrated under clause (iii) of sub-section (4) of section 12, attracting penalty imposable under clause (iii) of sub-section (5) of section 12 of TNGST Act read with section 9(2A) of CSTA. We are, therefore, of the view that the order of the Tribunal to retaining the penalty to the extent of 50 per cent minimum prescribed, as had been done by AAC cannot at all be allowed to stand and the same deserves to be dismissed and the same is, accordingly set aside. 15. In fine this revision is allowed in part, in the sense of setting aside the reduced penalty, as had been imposed upon the assessee-dealers by Appellate Assistant Commissioner (CT)-I, Madras-108. The revision in other respects shall, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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