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The Commissioner, Trade Tax U.P. Lucknow v. S/S Sarsadi Lal Enterprises Pvt. Ltd. - SALES/TRADE TAX REVISION No. 415 of 1999 [2006] RD-AH 17984 (18 October 2006)


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Court no.22


The Commissioner, Trade Tax, U.P. Lucknow.           Applicant


Sir Shadi Lal Enterprises Ltd., Muzaffarnagar.      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 6th February, 1998 relating to the assessment year, 1986-87.

The dealer/opposite party (hereinafter referred to as "dealer") was involved in the business of manufacture and sales of country liquor, IMFL, sugar etc. In the present revision, two disputes have been raised, namely, whether the obscuration duty is part of the turnover and amount of freight charged in the bill separately for the sale of IMFL to Canteen Stores Department to the extent of Rs. 5, 67,767.74 paise is part of the turnover.

Heard learned counsel for the parties.

So far as obscuration duty is concerned, first appellate authority and the Tribunal held that in writ no.6844 of 1974 M/S Rampur Distillery and Chemical Company, Rampur decided on 13.11.1979 and other cases, the Apex Court held that the levy of obscuration duty was not legal. It has been held by the first appellate authority that though the dealer had charged the amount of obscuration duty in the bill, but the same was not paid by the purchaser and in these circumstances, it has been held that it is not the part of the turnover.

With regard to the freight, it has been held that the freight was separately charged in the bill and, therefore, it cannot be a part of the turnover. Reliance has been placed on the decisions of the Apex Court in the case of M/S Vinod Coal Syndicate Versus CST reported in 1988 UPTC 218, CST Versus Indian Aluminium Cable Co. Ltd., Ghaziabad reported in 1995 UPTC 705, CST Versus U.P. Straw and Agro Production Ltd., Moradabad reported in 1995 UPTC 740, CST Versus Super Bread Pvt. Ltd., Meerut reported in 1995 UPTC 969 and the definition of sale price in Section 2 (h) of the Central Sales Tax Act.

I do not find any error in the order of the Tribunal. Apex Court held the levy of obscuration duty illegal. In the present case, it was also found that the amount towards obscuration duty was not paid by the customer to the dealer, the question of its inclusion in the turnover does not arise. The first appellate authority and the Tribunal rightly held that it cannot be a part of the turnover.

So far as freight is concerned, admittedly, it was separately charged. It is not the case of the revenue that the contract was for the supply of liquor at the customer's destination and for that a composite was stipulated and, thereafter, the freight and price was bifurcated from the bill. Section 2 (h) of the Central Sales Tax Act reads as follows:

"sale price" means the amount payable  to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged."

Under the aforesaid section, if the freight is separately charged, it cannot be a part of the turnover.

In these circumstances, revision has no merit and is, accordingly, dismissed.




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