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TMI Blog2015 (1) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered office in the State of Karnataka, Bengaluru. It attended the office of the concerned Revenue Officer, in response to notice issued under section 33 of the Act. The Respondent is an importer and reseller of hardware in general and radio pagers in particular. After hearing the Respondent, its general turnover of sales was determined at Rs. 1,33,99,555/- including tax collection of Rs. 4,33,947/- and collection of other charges such as license fees, airtime charges and service tax amounting to Rs. 39,78,768/-. It was the Applicants' contention that the Respondent - dealer could not explain the difference between the sales as per annual returns and sales disclosed in the statement. During the course of verification of the sales bills the applicant found that the dealer had charged separately for pagers under the heading "Hardware less discount add Sales tax". Separate charges were levied for "License fees and airtime charges less discount plus service tax". The sum total of all the amounts were collected in cash or by cheque. 3. It transpires that the dealer had collected sales tax only on value of the hardware, viz the pagers and no sales tax was collected on the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d quantum of tax and reduced interest under section 36(3) (b). However, he confirmed the order of assessment as regards airtime charges and license fees. The Respondent dealer then filed the second appeal before the tribunal, which in its judgment on 7.6.2012 allowed the appeal and held that airtime charges and license fees were not part of the sale price. It is in this background that the question has been referred to this Court. 7. Mr.Sonpal in the course of his submissions conceded that the airtime charges would not form part of the sale price. He, however, contended that the license fees would definitely form part of the sale price. In support of his contention he relied upon a decision of the Hon'ble Supreme Court in the matter of M/s.Central Wines, Hyderabad vs. Special Commercial Tax Officer Sales Tax (1987) 2 SCC 371 which observed in paragraph 7 as under : "7..... .... .... Even if therefore the bill or the voucher issued to the purchaser indicates the amount of sales tax separately what is collected by the vendor from the vendee is not tax but is merely a part of the sale price charged by the vendor to the vendee. So far as the statute is concerned it does not cast any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the service. The license fees in question could be two fold, i.e. license fees payable by the Respondent dealer to the Competent Authorities or the pro-rata license fees payable by the subscriber in order to avail of the paging service. The cost of the hardware is thus separate from the cost of airtime and the cost of license fees. 10. It is also convenient for us to now refer to the meaning of the words "sale price". The expression "sale price" is defined in section 2(p) as follows : ".... the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in case where such costs is separately charged." Thus, in order to qualify as sale price the amount paid or payable to the dealer must include any sum charged for anything done by the dealer in respect of the goods at the time and/or before delivery thereof when such cost is charged separately. On analyzing the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acquisition of pager nor they are charged or incurred prior to the delivery of the pager. There is no question of including them in the sale price of the pager. He submitted that the sales order form represented the contract between the Respondent and their customers and under the product order details there was separate categorisation of the costs of the pager unit and that of the license fee. The sales order clearly mention that there are separate obligations one being of the sale of pager and another of the service which will enable the purchaser of the pager to receive messages on the pager. 13. In the case of Imagic Creative Pvt. Ltd. (supra) the Hon'ble Supreme Court found that those who provide service i.e. service providers, are assessable to the service tax and a distinction can be made in between an indivisible contract and a composite contract. The purport and object for which the constitution had to be amended and clause (29A) had to be inserted in Article 366, must be borne in mind. Mr.Patkar further submitted that the judgments of the Hon'ble Supreme Court in the case of Hindustan Sugar Mills (supra) and M/s.Central Wines, Hyderabad (supra) were rendered pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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