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TMI Blog2013 (10) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the free issue material, and it is also not in dispute that the petitioner had not collected any sales tax and the railways had not paid any amount on the value representing the free issue material. In that view of the matter, and in view of the law laid down by the Supreme Court, the sale price for the purpose of section 5 of the Act, is the actual consideration that is received/ receivable by the dealer alone can be the basis for levy of sales tax. - Decided in favour of assessee. - Case Nos. 22,25,27,28 of 2005 - - - Dated:- 11-10-2013 - ROHINI G. AND CHALLA KODANDA RAM, JJ. The judgment of the court was delivered by CHALLA KODANDA RAM J.- These four tax revision cases are filed by the petitioner, M/s V. S. Engineering (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es including the Tribunal had rejected the claim of the petitioner that their activity of manufacture and supply of the mono block concrete sleepers to the South Central Railways, is a works contract and had held that the petitioner's supply is sales of mono block concrete sleepers. The authorities also held that the petitioner is liable to pay tax on the value of the free issue material, viz., fastenings, malleable cast iron inserts and HTS wire (strands), which were incorporated and became part of the sleepers. 4. There is no dispute about the factum of these items were issued free of cost by the railways. The Tribunal had rejected the contention of the petitioner that these free issue items cannot form part of the sale price, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in income-tax cases, tax is exigible on 'real income' which means the actual income received by or which accrues to the assessee. In case of sales tax, tax is exigible on real price received or receivable by the dealer in respect of a sale. A dealer is entitled to frame his price-structure in a manner conducive to the type of his business or with a view to withstand the competition. In a given case, cost may be more than the price. The dealer may base his price-structure to give an incentive to his clients, agents, distributors, etc., particularly if he is a manufacturer. In such cases, his price-structure has to be scrutinized by the Department under the sales tax law to find out the real sale price receivable by him. There m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2(i) of the 1948 Act. ... 22. U.P. Trade Tax Act, 1948 is a self-contained code for levy of tax on sale or purchase of goods in Uttar Pradesh. Clause (bb) of section 2 defines the expression 'trade tax' to mean a tax payable under the Act. Clause (h) of section 2 defines the expression 'sale' to include transfer of the right to use any goods for any purpose for cash or deferred payment or other valuable consideration. In this case we are concerned only with section 3 and not with section 3F of the 1948 Act. Section 3, inter alia, provides that every dealer shall for each assessment year pay a tax at the rates provided under section 3A, section 3D or section 3H on his turnover of sales or purchases or both, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, for sales tax purposes, what has to be taken into account is the consideration for transfer of property in goods from the seller to the buyer. For this purpose, tax is to be levied on the agreed consideration for transfer of property in the goods and in such a case cost of manufacture is irrelevant. As compared to the sales tax law, the scheme of levy of excise duty is totally different. For excise duty purposes, transfer of property in goods or ownership is irrelevant. As stated, excise duty is a duty on manufacture. The provisions relating to measure (section 4 of 1944 Act read with the Excise Valuation Rules, 2000) aim at taking into consideration all items of costs of manufacture and all expenses which lead to value addition to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of sales tax. 9. So far as the judgment of the Division Bench referred to by the learned Special Government Pleader, it is clearly distinguishable. The question involved in the above batch of cases was whether the dealer was entitled to claim refund of the sales tax amount wrongly paid to the Department? . That was also a case involving supply of mono block concrete sleepers to the railways and the petitioner therein was involved in the similar business as that of the petitioner herein. Though the issue whether the sales tax could be levied on the free issue material was directly not in issue, but a reading of the said judgment would indicate that there appears to be no dispute as to the aspect that the sales tax could be levied o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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