Vimalchand Prakashchand Vs. Commissioner of Sales Tax - Court Judgment

Excerpt:
- madhya pradesh nagar tatha gram nivesh adhiniyam (23 of 1973)section 50(4) proviso (as inserted by act of 2004): [dipak misra, krishna kumar lahoti & rajendra menon, jj] preparation of town development scheme proviso prescribing time limit held, object of amendment is to remove hardship caused to citizens and to provide time limit to consider objections and suggestion and to provide a deeming clause so that the authority would act in quite promptitude. proviso unequivocal, categorical and unambiguous and does not permit any other kind of construction but a singular one. section 50 (4) proviso (as inserted by act of 2004): [dipak misra, krishn kumar lahoti & rajendra menon, jj] preparation of town development scheme held, proviso is not retrospective. scheme already finalised will not lapse and has to be completed within the time span provided under proviso. no vested right accrues in favour of authority on commencement of process of preparation of scheme, which cannot be impaired by introducing proviso. section 50(4) proviso (as inserted by act of 2004): [dipak misra, krishn kumar lahoti & rajendra menon, jj] preparation of town development scheme held, proviso uses the term shall be deemed to have lapsed. it does not convey that scheme gets automatically lapsed. - , have no relation with the sale of the goods and that the carrying charges are levied after the sales are complete for failure of the mills to pay the price of the goods within time.orderp.d. mulye, j.1. this order shall also govern the disposal of m. c. c. no. 101 of 1985 (vimalchand prakashchand v. commissioner of sales tax, m.p.), m.c.c. no. 102 of 1985 (vimalchand prakashchand v. commissioner of sales tax, m. p.) and m. c. c. no. 103 of 1985 (vimalchand prakashchand v. commissioner of sales tax, m. p.) as all these references under section 44 of the m. p. general sales tax act, 1958, read with section 9 of the central sales tax act, 1956, at the instance of the assessee, are sent to this court to answer the following question of law, propounded by the sales tax tribunal :whether, on the facts and in the circumstances of the case, the tribunal was justified in holding that carrying charges and other expenses (postage, telephone charges, telegrams, etc.) did form a part of the sale price.2. two of the references are in respect of the assessment year 6th january, 1972 to 26th october, 1973 and the other two references are in respect of the year 27th october, 1973 to 13th november, 1974.3. the statement of facts as narrated, may be stated, in brief, thus : the assessee is a dealer in cotton and cotton seed. he had charged as per his account books expenses on insurance, hundawan, carrying charges, rui charges, telephone and telegraph charges, etc., to the extent as given below :year 1972-73 year 1973-741. carrying charges ... rs. 4,73,375 9,23,0622. rui expenses ... rs. 53,226 31,0233. postage ... rs. 5,485 -4. telephone ... rs. 26,199 27,5305. telegram ... rs. 3,382 1,7026. hundawan ... rs. 5,697 5,6814. the assessee contended that the carrying charges were not part of the price of the goods but a charge on delay in making the payments by the mill on account of goods sold to them. the carrying charge is stated as percentage of amount due and is recovered by separate bill. other charges were debited to the purchasers but did not form part of the selling price. their contention was rejected and the amount was assessed to sales tax.5. the assessee preferred an appeal before the deputy commissioner of sales tax, ujjain, which held that the burden of proving that the charges under various heads did not form part of the consideration, was on the appellant-assessee. it was not denied by the assessee that the refusal on the part of the buyer to pay the carrying charges could lead to refusal on the part of the assessee to perform the contract. as such the deputy commissioner rejected the contention of the applicant.6. the assessee-appellant further approached the sales tax tribunal repeating the same contention, which also dismissed the same on the ground that the burden of proving that the sums charged by the dealer in respect of goods at the time of or before the delivery thereof, did not form any part of the consideration for the sale of cotton, was on the assessee; that there was no evidence to show that the carrying charges and other expenses for which exemption is claimed did not form part of such consideration and that there was nothing on record to lead to the inference that the appellant-assessee holds goods as a bailee on behalf of the purchaser-once the goods had been selected, weighed, lots marked for the purchaser by the appellant.7. hence these references at the instance of the assessee.8. the learned counsel for the petitioner-assessee submitted that the carrying charges or other charges by postage, telegram, telephones, etc., have no relation with the sale of the goods and that the carrying charges are levied after the sales are complete for failure of the mills to pay the price of the goods within time. he, therefore, submitted that these charges are not covered by the definition of 'sale price' as defined under the sales tax act. he, therefore, submitted that the sales tax authorities have committed an illegality in rejecting the contention of the purchaser-assessee.9. on the other hand the learned government advocate appearing for the respondent submitted that all the sales tax authorities have found as a fact that the carrying charges were recovered by the petitioner-assessee before the delivery of the goods and that he had also recovered the other charges from the customers. the learned government advocate, therefore, submitted that in the case of the petitioner himself in the decision reported in [1968] 22 stc 22 (mp) (vimalchand prakashchand, sarafa, ujjain v. commissioner of sales tax, m.p.) this point has been decided against the petitioner-assessee. the learned government advocate also placed reliance on the supreme court decision reported in [1971] 28 stc 331 (delhi cloth and general mills co. ltd. v. commissioner of sales tax, indore) wherein also the same view has been taken. he, therefore, submitted that the finding on these points has been against the petitioner-assessee and consequently the sales tax authorities have rightly rejected the contentions of the petitioner and, therefore, the references have to be answered against the assessee and in favour of the respondents.10. the supreme court in recent decisions reported in (1987) 2 scc 371 (central wines, hyderabad v. special commercial tax officer) and (1987) 2 scc 395 (hyderabad asbestos cement products ltd., hyderabad v. state of andhra pradesh) while dealing with the question of turnover of sales tax has also found that such collections would be liable to sales tax.11. thus, after hearing the learned counsel and after considering the facts and circumstances of the case as also the case law cited, we have reached the conclusion that the question referred to us for our decision has to be answered against the petitioner-assessee and in favour of the revenue.12. the references are answered accordingly with no order as to costs.

Judgment:
ORDER

P.D. Mulye, J.

1. This order shall also govern the disposal of M. C. C. No. 101 of 1985 (Vimalchand Prakashchand v. Commissioner of Sales Tax, M.P.), M.C.C. No. 102 of 1985 (Vimalchand Prakashchand v. Commissioner of Sales Tax, M. P.) and M. C. C. No. 103 of 1985 (Vimalchand Prakashchand v. Commissioner of Sales Tax, M. P.) as all these references under Section 44 of the M. P. General Sales Tax Act, 1958, read with Section 9 of the Central Sales Tax Act, 1956, at the instance of the assessee, are sent to this Court to answer the following question of law, propounded by the Sales Tax Tribunal :

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that carrying charges and other expenses (postage, telephone charges, telegrams, etc.) did form a part of the sale price.

2. Two of the references are in respect of the assessment year 6th January, 1972 to 26th October, 1973 and the other two references are in respect of the year 27th October, 1973 to 13th November, 1974.

3. The statement of facts as narrated, may be stated, in brief, thus : The assessee is a dealer in cotton and cotton seed. He had charged as per his account books expenses on insurance, hundawan, carrying charges, rui charges, telephone and telegraph charges, etc., to the extent as given below :

Year 1972-73 Year 1973-741. Carrying charges ... Rs. 4,73,375 9,23,0622. Rui expenses ... Rs. 53,226 31,0233. Postage ... Rs. 5,485 -4. Telephone ... Rs. 26,199 27,5305. Telegram ... Rs. 3,382 1,7026. Hundawan ... Rs. 5,697 5,681

4. The assessee contended that the carrying charges were not part of the price of the goods but a charge on delay in making the payments by the mill on account of goods sold to them. The carrying charge is stated as percentage of amount due and is recovered by separate bill. Other charges were debited to the purchasers but did not form part of the selling price. Their contention was rejected and the amount was assessed to sales tax.

5. The assessee preferred an appeal before the Deputy Commissioner of Sales Tax, Ujjain, which held that the burden of proving that the charges under various heads did not form part of the consideration, was on the appellant-assessee. It was not denied by the assessee that the refusal on the part of the buyer to pay the carrying charges could lead to refusal on the part of the assessee to perform the contract. As such the Deputy Commissioner rejected the contention of the applicant.

6. The assessee-appellant further approached the Sales Tax Tribunal repeating the same contention, which also dismissed the same on the ground that the burden of proving that the sums charged by the dealer in respect of goods at the time of or before the delivery thereof, did not form any part of the consideration for the sale of cotton, was on the assessee; that there was no evidence to show that the carrying charges and other expenses for which exemption is claimed did not form part of such consideration and that there was nothing on record to lead to the inference that the appellant-assessee holds goods as a bailee on behalf of the purchaser-once the goods had been selected, weighed, lots marked for the purchaser by the appellant.

7. Hence these references at the instance of the assessee.

8. The learned counsel for the petitioner-assessee submitted that the carrying charges or other charges by postage, telegram, telephones, etc., have no relation with the sale of the goods and that the carrying charges are levied after the sales are complete for failure of the mills to pay the price of the goods within time. He, therefore, submitted that these charges are not covered by the definition of 'sale price' as defined under the Sales Tax Act. He, therefore, submitted that the sales tax authorities have committed an illegality in rejecting the contention of the purchaser-assessee.

9. On the other hand the learned Government Advocate appearing for the respondent submitted that all the sales tax authorities have found as a fact that the carrying charges were recovered by the petitioner-assessee before the delivery of the goods and that he had also recovered the other charges from the customers. The learned Government Advocate, therefore, submitted that in the case of the petitioner himself in the decision reported in [1968] 22 STC 22 (MP) (Vimalchand Prakashchand, Sarafa, Ujjain v. Commissioner of Sales Tax, M.P.) this point has been decided against the petitioner-assessee. The learned Government Advocate also placed reliance on the Supreme Court decision reported in [1971] 28 STC 331 (Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax, Indore) wherein also the same view has been taken. He, therefore, submitted that the finding on these points has been against the petitioner-assessee and consequently the sales tax authorities have rightly rejected the contentions of the petitioner and, therefore, the references have to be answered against the assessee and in favour of the respondents.

10. The Supreme Court in recent decisions reported in (1987) 2 SCC 371 (Central Wines, Hyderabad v. Special Commercial Tax Officer) and (1987) 2 SCC 395 (Hyderabad Asbestos Cement Products Ltd., Hyderabad v. State of Andhra Pradesh) while dealing with the question of turnover of sales tax has also found that such collections would be liable to sales tax.

11. Thus, after hearing the learned counsel and after considering the facts and circumstances of the case as also the case law cited, we have reached the conclusion that the question referred to us for our decision has to be answered against the petitioner-assessee and in favour of the Revenue.

12. The references are answered accordingly with no order as to costs.