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TMI Blog2021 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... n the invoice. It is seen that the Petitioner had indicated separately the freight charge of ₹ 45/-. The Tribunal committed a serious error in understanding the freight charge to be same freight charge irrespective of the distance between the factory of the Petitioner and the destination of the Purchaser. The crucial factor, which was missed, was that the rate was an uniform rate of ₹ 45 per piece as this was for a supply of 50000 units - In almost identical facts, the Supreme Court in STATE OF KARNATAKA AND ANOTHER VERSUS BANGALORE SOFT DRINKS PVT. LTD. [ 1998 (9) TMI 539 - SUPREME COURT] held that despite there being a uniform rate per unit as freight charge that still would not be included in the sale price - the case supports the case of the Petitioner is that in the instant case the freight charges are not includable in the sale price, which is amenable and therefore, has to be excluded while calculating the taxable turn over for the purposes of the OST Act. In the considered view of the Court, since the Tribunal made a factual error as regards the place of delivery in terms of the Clauses of the Contract in the present case, it made a further error in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Excise Duty (3) Sales Tax (4) Freight (5) Any other levy (6) Unit price inclusive of all levies and charges (7) Discount (8) Total dues accounted price 5. It is stated that in its bid, the Petitioner specifically gave the break up price quoted by it for supply of Socket-B in the following manner: Basic Unit Price exclusive of all levies and charges but inclusive of packing, forwarding and insurance : ₹ 261.70/- Excise @ 15 % : ₹ 39.26/- Sales Tax @ 4 % : ₹ 12.04/- Freight : ₹ 45.00/- Unit Price inclusive of all levies and charges : ₹ 358.00/- 6. The above quote was per unit of the C.I. Socket-B. The total quotation was for 50,000 Nos. aggregating to ₹ 1,79,00,000/-. 7. The Petitioner s bid was accepted. The DoT visited the Petitioner s factory, inspected the goods and earmarked them. In terms of the conditions attached to the bid, the sale was complete at that stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Petitioner submitted that the definition of sale price under Section 2 (h) of the CST Act made it clear that the sale price excluded the cost of freight of delivery where such cost was separately charged. He further referred to the clauses in the contract which made it clear that the sale was completed inside the Petitioner s factory, once it was inspected by the DoT and the goods to be sold were earmarked for purchase. He pointed out that the Petitioner had transported the goods to the site of the DoT at the latter s behest, after the sale was complete. Accordingly, the freight was charged separately and could not be included in the sale price. In support of his contention that even when the freight is shown as a uniform per unit price, it would still be not includible in the sale price. Mr. S. Ray relied on the decision of the Supreme Court in State of Karnataka and another v. Bangalore Soft Drinks Pvt. Ltd. (2000) 117 STC 413 (SC). He also placed reliance on the decisions in Shree Rani Sati Mining Traders v. Sales Tax Officer (1983) 53 STC 322 (Orissa); Orient Paper Mills Ltd. v. State of Orissa (1975) 35 STC 84 (Orissa); Greaves Chitram Ltd. v. State of Tamil Nadu (199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems given in schedule of requirement. 9.3 The prices quoted by the Bidder shall remain fixed during the entire period of contract and shall not be subject to variation on any account. A bid submitted with an adjustable price quotation will be treated as nonresponsive and rejected. 9.4 The unit prices quoted by the Bidder shall be in sufficient detail to enable the Purchaser to arrive at prices of goods/equipment/system offered. 9.5 Unless otherwise stated the rates shall be quoted on F.O.R. DESTINATION in the States of Maharashtra and Goa in fully packed condition (where packing is prescribed in the Technical Specification) and duly marked. 15. From the above Clauses, it is plain that the bidder was required to separately indicate the components of excise duty, sales tax, insurance and freight. The rate was to be quoted on FOR Destination in the States of Maharashtra and Goa. 16. Clause 9.7 which is also important reads as under: 9.7 The price approved by the department for procurement will be inclusive of levies taxes, packing, forwarding, freight and insurance as mentioned in Para 9.1 above. Break-up in various heads like Excise Duty, Sales Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till the goods are received by the consignee. The appellant was responsible for all kinds of losses i.e. loss due to theft, damage, shortages till before receipt of entire quantity of stores in good condition by the consignee. As would seen from the terms and conditions of the purchase order placed on the appellant the purchasers are not concerned about how much freight is incurred by the appellant in making goods available at the designated places and so also not concerned about any losses in theft, any loss or damage effected to the goods in between the place of origin and the place of receipt. No rate specification for the cost of goods, the central excise, sales Tax and freight cost in the purchase order where the rate given as fixed and final including all expenses. The division of the composite price under different Heads like Unit cost, excise and sales Tax and transportation in the Bid documents submitted by the appellant himself is a self act having no impact or influence on the purchaser at all who only make payment at the rate of unit price. The study of the terms and conditions of the purchase order leads to an unambiguous conclusion that the transport cost is not a po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight charges uniformly irrespective of the distance. For this the revision petitioner contended that it has charged uniform rate of ₹ 4 per crate with a view to maintain a uniform price of their product throughout their territory of operation and charging of such equalized price is a common trade practice. The petitioner in support of his contention placed reliance on a decision of this Court in the case of Premier Breweries Ltd. v. State of Karnataka reported in [1984] 56 STC 14. In this decision, this Court has approved the charging of uniform rate of freight charges irrespective of distance of transportation. Therefore, the revision petitioner with a view to see that his products should be available for sale at all places at a uniform price, has charged the freight charges at uniform rate. 25. In the considered view of the Court, since the Tribunal made a factual error as regards the place of delivery in terms of the Clauses of the Contract in the present case, it made a further error in distinguishing the above decision as not applicable to the facts. On the other hand, this Court finds that the said decision is squarely applicable to the fact in the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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