High Court of Judicature at Allahabad
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The Commissioner,Trade,Tax U.P.Lucknow v. M/S. Mansarowar Bottling Co, Ltd. - SALES/TRADE TAX REVISION No. 758 of 1995  RD-AH 1205 (25 October 2004)
TRADE TAX REVISION NO.758 OF 1995
The Commissioner, Trade Tax, U.P., Lucknow. ....Applicant
M/s Mansarowar Bottling Co. Ltd., Nazibabad. ....Opp.party
Hon'ble Rajes Kumar, J.
Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 24.12.1994 relating to the assessment year 1988-89.
Following question has been raised:
"Whether on the facts and circumstances of the case, was LRD Tribunal legally justified to hold that the amount of transportation charges, is not part of turnover, and rather to hold that the amount charged as rent or security of bottles and crates is also not part of the turnover?"
Dealer/opposite party (hereinafter referred to as "Dealer") was carrying on the business of manufacture and sales of cold drinks etc. Tribunal found that the dealer had charged the transportation charges separately by issuing debit note and had also charged the rent towards bottles and crates from its purchasers separately and accordingly, held that the transportation charges and the amount charges towards rent of bottles and crates could not be a part of turn over.
Heard learned counsel for the parties.
Learned Standing Counsel is not able to show that the contract for the supply of good was FOR buyer destination. Admittedly, freight was separately charged by issuing a debit note and, therefore, in view of the Explanation of Section 2 (i) of the Act, which defines Turn over, freight could not be a part of turn over.
Section 2 (i) of the Act reads as follows:
"Turnover" means the aggregate amount for which goods are supplied or distributed by way of sale or are sold, by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration:
Explanation I - Omitted
Explanation -II - Subject to such conditions and restrictions, if any, as maybe prescribed in this behalf---
(i) the amount for which goods are sold or purchased shall include the price of the packing material in which they are packed and any sums charged for anything done by the dealer in respect of the goods sold, at the time of or before the delivery thereof, other than cost of freight or delivery or cost of installation or the amount realized as trade tax on sale or purchase of goods, when such cost or amount is separately charged;"
Aforesaid section has been considered by the Apex Court in the case of M/s Vinod Coal Syndicate Vs. CST, reported in 1988 UPTC, 218. Apex Court held as follows:
"Clause (i) of Section 2 of the U.P. Sales Tax Act, defines the expression ''turn over' as the aggregate amount for which goods are supplied or distributed by way of sale or sold, by a dealer, either directly or through another. Clause (i) of Explanation II provides that "the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof, other than the cost of freight or delivery, or cost of installation or the amount realised as sales or purchase tax, when such cost or amount is separately charged." Plainly, the legislature intended that where the cost of freight was charged separately, that amount could not be included in the turnover of a dealer. That is what was done in this case. The freight was separately charged and was paid accordingly by the principals. The High Court erred in including the cost of freight in the taxable turnover of the appellant."
So far as the rent charged from the customers for providing bottles and crates are concerned, it was also separately charged. In the case of CST Vs. S/S Actuas Victuous Pvt. Ltd., Bareilly, reported in 1999 UPTC, 966. This Court held that rent of crates and bottles, which are returned by the purchasers are not liable to be included in the taxable turnover. Relevant para of the decision reads as follows:
"The respondent is a manufacturer of cold drinks. The cold drinks is contained in the bottles which are put in the crates and are supplied to the whole-seller and retailers. The crates and bottles are returned and rent is charged for them. The Tribunal has held that such rent is not includible in the turnover of the cold drinks. A similar controversy arose in the dealer's own case in Sales Tax Revision No.221 and 223 of 1994 decided by me today in which the Tribunal's order has been upheld.
Following the order in the aforesaid revisions I hold that the Tribunal has rightly held that rent for crate and bottles is not includible in the turnover."
For the reasons stated above, revision fails and is accordingly, dismissed.
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