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TMI Blog2015 (4) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... deterioration to the consignment in transit if the same is to be carried in their own or contractor's truck's/tank lorries to the destination station and as per the terms and conditions of DGS & D, the rate contract, as noticed earlier and specifically mentioned herein above, it was the duty of the assessee to deliver the goods at the destination. Therefore, in my view, the Tax Board has rightly come to the conclusion that the freight is includable in the sale price - Decided against assessee. - SB Sales Tax Revision Petition No. 1/2011, SB Sales Tax Revision Petition No. 39/2013, SB Sales Tax Revision Petition No. 40/2013, SB Sales Tax Revision Petition No. 41/2013, SB Sales Tax Revision Petition No. 43/2013 - - - Dated:- 20-3-2015 - Hon'ble Mr. Justice J. K. Ranka,JJ. For the Petitioner : Mr T C Jain For the Respondent : Mr Alkesh Sharma JUDGMENT REPORTABLE 1. These five sales tax revision petitions are directed against orders of the Rajasthan Tax Board dt.12/10/2009, 12/10/2012, 12/10/2012, 12/10/2012 and 12/10/2012 respectively relating to Assessment Year 1999-2000, 2006-07, 2007-08, 2008-09 and 2009-10 respectively. Since the facts are identical i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt- Revenue in so far as the freight is concerned. However, in so far as penalty under Section 65 is concerned, it was deleted. 6. Ld. counsel for the petitioner contended that on perusing the terms and conditions of the agreement, which has been placed on record by the petitioner-assessee, reading of Section 2(36) of the Rajasthan Value Added Tax Act, 2003 (for short, RVAT Act') and terms of delivery goes to show that freight was reimbursable by the Railways separately. Counsel further contended that since the petitioner-assessee does not have its own containers to carry diesel for delivery at the destination, therefore, it hired services of containers from container owners on cost basis which was paid to the transporters. Counsel drew attention of this Court to the terms of contract and in particular the terms of delivery in the agreement. It was contended that the delivery of goods was at selling point and that the petitioner-assessee was required to send the goods (diesel) to various places. He contended that the terms and conditions with regard to transportation by road specified that supplies made in trucks/tank lorries from refinery/MI/pipeline, Taps/Depot gates shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-assessee that freight was separately paid by the Railways in terms of the agreement, if any. She further contended that the judgments relied upon by counsel for the petitioner-assessee are distinguishable on facts and submits that the judgments rendered by the Hon'ble Apex Court in the case of Hindusthan Sugar Mills Vs. State of Rajasthan ors.: AIR 1978 (SC) 1496 and India Meters Limited Vs. State of Tamil Nadu: 2010 (9) UJ 4287 supports the claim of the respondent-Revenue and thus she pleaded that the Tax Board, after analyzing the judgments, has decided the controversy correctly and strongly supported the judgment of the Tax Board. 8. The controversy in brief, as has been noticed earlier, is as to whether freight is part of the sales turnover or not is a mute question to be considered in the matter. 9. Admittedly, in so far as the freight by rail transport is concerned, there is no dispute but the dispute is with reference to the goods (diesel) being transmitted by road transport to the destination as would be directed by the buyer i.e. Railways. While the contention of the counsel for the petitioner-assessee is that freight is separately reimbursable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the assessee to prove that the said amount was separately reimbursable. 11. The note appended to Schedule-A, which is a rate contract between the assessee and the Government of India, Directorate General of Supplies and Disposals, New Delhi and other relevant clauses read as under:- Note:-The prices are subject to change and prices ruling on the date of supply will be payable. The prices are ex-storage point prices at Refineries/Installations and are exclusive of excise duty. Transportation from Refineries to depots/Terminals and consignee destinations. Sales Tax/VAT, State specific cost, octroi duty, local levies, entry tax etc. shall be charged extra as applicable. 6.Terms of Delivery : FOR EX-MI-Refineries. 7. Excise Duty : Excise duty will be charged on actual rate basis on date of supply and is extra over the quoted price and other cast elements as per excise rules. In case of downward revision of excise duty, actual of excise duty shall be charged/billed to the purchaser by the supplier. All such adjustments shall also include relief exemption, concession etc., if any obtained by the supplier. 17.Place where the stores are tendered for inspection: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rioration only if the consignment has been booked under said to contain RR as a full wagon load and the Railway seals of the wagons are found intact at the destination station in that case a notice of the seals of the wagon being found intact and the details of shortage, damage or deterioration as the case may be as early as possible, but in any case before the expiry of 30 days from the date of taking delivery from the Railway, has to be given by the consignee to the supplier. In all other cases of rail consignments the firm will not be responsible and liable for any shortage loss, damage or deterioration accruing in transit and the matter will be taken up by the consignee expeditiously with the concerned Railway Administration. For ex MI/Depot supplies the responsibility of the firm for supplies will cease once the product leaves the oil company premises. 14. Supplies from Alternative Sources in Tank Wagons: The rate of Sales Tax will vary with the source of actual supply of product from time to time depending Supplies from the normal pricing source will be made on freight to pay basis. In case, however, supplies are made from sources other than the main Installation/ R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) For returning the tank truck without taking delivery of the product for any reason whatsoever, delivery charges will be payable by the CCA at the applicable rates on the basis of your authorised officers certificate. viii) When supplies cannot be undertaken to consignee's premises for any reason, the buyer's shall draw their requirement from your supplying Depots under their own management. For such supplies, Ex-Depot rates will apply. ix) Distance between MI/Refinery/Pipeline Top/Depot and consignee's storage/consumer pumps as certified by Corporation's authorised officer in the bills will be treated as final and accepted by the CCA for purpose of payment of bills. In the event of dispute regarding the distance a joint verification will be undertaken by you and the consignee. You agree to adjust the overdrawal/ under payments based on the agreed final distances. 12(b) Price payable on the date of supply (i) The prices are subject to variation without notice and the revision in the list prices as applicable from time to time will be advised by M/s IOC, HPC, BPC and MRPL to Zonal Railways. In support of these prices and revision thereto, Master Price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... measurements checked before the products leave firm's premises, if he so desire. 7.TRANSIT RISK: a) Firm shall be responsible and liable for any shortages, damages or deterioration to the consignment in transit if the same is to be carried in their own or contractor's trucks/ tanks/ lorries to the destination. b) In case of rail consignments, firm shall be responsible and liable for such shortage, damage or deterioration only if the consignment has been booked under said to contain RR as a full wagon load and the Railway seals of the wagons are found intact at the destination station. In that case a notice is to be served on the supplier by Regd. Post indicating the date of the seals of the wagons being found intact and the details of shortage, damage or deterioration, as the case may be, as early as possible, but in any case before the expiry of 30 days from the date of taking delivery from the Railway. 12. On a conjoint reading of the aforesaid clauses entered into by and between the parties, in my view, as per terms and conditions in the contract, when the seller was required to deliver the goods at the destination after taking into consideration the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes against the assessee as it was neither proved before the AO nor upto the Tax Board about the factum that the purchaser (Railways) paid/borne separately the freight charges. Therefore, on this factual finding also, when the assessee was unable to lead any evidence, this view strengthens the claim of the Revenue. The burden casted on the assessee was not discharged despite opportunities granted. 14. In my view, the judgment of the Hon'ble Apex Court in the case of Hindustan Sugar Mills Ltd. (supra), which has been relied upon by both i.e. the Revenue as well as the assessee, supports the contention of the Revenue. It would be appropriate to quote the relevant observations in the aforesaid judgment, which, in my view, also governs in the instant petition, which reads ad-infra:- 15. We are of the view that the former, and not the latter, represents the correct legal position. If the obligation to pay the freight were on the purchaser and in fact the purchaser paid the freight, as happened in both the cases before us in respect of every transaction of sale of cement, the amount of freight would obviously be deducted from the F.O.R. destination railway station price in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of or before the delivery thereof' is to be regarded as part of 'sale price', even if it does not fall within the first part of the definition. But there is an exception carved out of this inclusion. Not all sums charged for something done by the dealer in respect of the goods at the time of or therefore the delivery thereof are covered by the inclusive clause. The cost of freight or delivery or the cost of installation certainly represents an amount charged for transportation or installation of the goods at the time of or before the delivery thereof and would, therefore, fall within the inclusive clause on its plain terms but it is taken out by the exclusion clause, other than the cost of freight or delivery or the cost of installation in case where such cost is separately charged . This exclusion clause does not operate as an exception to the first part of the definition. It merely enacts an exclusion out of the inclusive clause and takes out something which would otherwise be within the inclusive clause. Obviously, therefore, this exclusion clause can be availed of by the assessee only if the State seeks to rely on the inclusive clause for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier i.e. the assessee till they are delivered at the destination station. Therefore, the judgment of India Meters Limited is applicable on the facts of the instant case. 16. In the judgment, relied upon by counsel for the assessee in the case of Vinod Coal Syndicate Vs. Commissioner of Sales Tax, U.P. Lucknow (U.P.) (supra), the facts were clearly proved from the material placed on record by the assessee that freight was separately charged and was paid separately, by the principals and the Hon'ble Apex Court went into the plain language of the Act. However, in the present case, the assessee, as observed herein above, even despite opportunities having been granted, was not able to provide the material to claim that the freight was separately charged and was paid separately by the principals (Railways). 17. In the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Kerala Vs. K.P. Moideenkutty (Decd.), the Hon'ble Apex Court had again an occasion to consider a case on a specific finding which was reached by the High Court as under:- There is abundant material on record which has been referred to by the Tribunal itself and by the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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