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TMI Blog2002 (11) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... r is engaged in the business of supply of carbon dioxide in cylinders. Under the provisions of the Gas Cylinders Rules, 1981, the petitioner is obliged to clean and test the cylinders before filling it with carbondioxide. The petitioner had incurred charges for cleaning and conducting hydraulic test of the said cylinders before filling it with carbon dioxide during the three assessment years concerned. The petitioner filed returns for the assessment years mentioned earlier including the said charges in the total turnover and claimed exemption in respect of the service charges incurred while arriving at the taxable turnover. The assessing authority initially completed the assessment for the years 1991-92 and 1992-93 granting exemption in respect of the charges claimed. However, the assessing authority reopened the assessment for the said two years and disallowed the exemption already granted and included the service charges collected from the customers as part of the taxable turnover and assessed the same to tax under section 5(1)(iii) of the Act. This order of the assessing authority was confirmed by the first appellate authority following the decision of the Andhra Pradesh High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules and, therefore, the charges incurred for the same is integrally connected with the transaction of sale of carbon dioxide in cylinders. He further submitted that whatever expenses incurred in connection with the sale of carbon dioxide in cylinders prior to its sale are liable to be included in view of the definition of "turnover" in the Act. He also relied on the decision of the Supreme Court in State of Kerala v. Madras Rubber Factory [1998] 108 STC 583; (1998) 1 KLT 201 and the decisions of this Court in G. Purushothama Panicker v. State of Kerala [1997] 107 STC 391; (1997) 2 KLT 75 and in Seven Seas Distillery (P) Ltd. v. State of Kerala [1991] 82 STC 71. 5.. We have considered the rival submissions. The facts are not in dispute. The petitioner is a supplier of carbon dioxide in cylinders. Cylinder is not the subject-matter of sale. As per the statutory requirements under the Gas Cylinder Rules, the petitioner had cleaned and tested the cylinders before filling them with carbon dioxide and sold carbon dioxide in cylinders and had raised an invoice wherein the petitioner charged the expenses incurred for cleaning and testing the cylinders separately. Under section 5 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler but not in that of the former." Thus "turnover" means the aggregate amount for which goods are either bought or sold. In the instant case so far as the purchaser of carbon dioxide is concerned, the consideration is the amount shown in the invoices which includes the price of the carbon dioxide and the charges for cleaning and testing the cylinders. He has to pay the amount shown in the invoice; he is unconcerned with the component of the price paid shown in the invoice. The question of invoking the explanation (2) to section 2(xxvii) arises only if something more than the invoice value is to be included. Explanation (2)(i) provides that the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of, or before, the delivery thereof. So by invoking the said provision, it is open to the assessing authority to include other items of expenditure incurred by a dealer prior to the delivery of the goods. 6.. In this case, we are not concerned with a situation attracting the provisions of explanation (2) to the definition of "turnover" in section 2(xxvii). In fact the petitioner had shown the charges c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the charges mentioned above formed part of the cost of packing and therefore deductible. This decision is also not applicable in view of the reasons stated earlier. In Seven Seas Distillery (P) Ltd. v. State of Kerala [1991] 82 STC 71 a division Bench of this Court considered the question whether the value of cartons used for packing bottled beer shown separately in the invoices is includible in the taxable turnover. The court held that though the value of cardboard as cartons was separately shown specified in the sale invoices it is includible in the turnover in view of explanation (2)(i) to section 2(xxvii) of the Act. In State of Kerala v. Madras Rubber Factory Ltd. [1998] 108 STC 583; (1998) 1 KLT 201 the Supreme Court considered the question whether the rubber cess collected from the manufacturers forms part of the purchase turnover exigible to sales tax. The Supreme Court, referring to the definition of "turnover" observed that, that the excise duty does not physically enter the manufacturer's till is, as held in the second McDowell case [1985] 59 STC 277 (SC), not the decisive test for determining whether or not it would be a part of the manufacturer's turnover. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r since it was incurred after the sale of timber logs under a separate contract. However, the principles will apply to the present case also. 7.. We have already come to conclusion that the charges incurred by the petitioner in cleaning and testing the cylinders are collected by the petitioner from the customers by including it in the invoice itself. What is charged in the invoice as consideration for the sale of gases in cylinders will form part of the turnover as per the definition of turnover in section 2(xxvii) of the Act. A division Bench of this Court in G. Purushothama Panicker v. State of Kerala-judgment dated April 2, 1997 in T.R.C. No. 36 of 1995 [1997] 107 STC 391; (1997) 2 KLT SN. 75 held that if any deduction is to be allowed it must be one of the terms specified in rule 9 of the Kerala General Sales Tax Rules. The petitioner did not establish that the charges collected in the invoice which forms part of the turnover is deductible under any of the clauses in rule 9 of the Rules. In this view of the matter, we are in full agreement with the decision of the Tribunal. There is no merit in these revisions. All these tax revision cases are accordingly dismissed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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