1976 (3) TMI 216 - HC - VAT and Sales Tax

Summary

Issues:
1. Includibility of sales tax collections in the taxable turnover.
2. Taxability of turnover of empty gunnies.

Analysis:
1. Includibility of sales tax collections in the taxable turnover:
- The case involved two different assessees, both claiming deductions based on sales tax collections included in their prices.
- M/s. Ultramarine and Pigments Ltd. sold goods with sales tax included in the price, claiming a deduction for the tax collected.
- The assessing authority initially rejected the claim, but the Tribunal ruled in favor of the assessees, directing the deduction of the actual sales tax collected.
- Reference was made to Board's instructions stating that sales tax collected should not be included in the total turnover.
- A previous case, Lipton (India) Ltd. v. State of Tamil Nadu, was cited to support the argument that sales tax need not be separately shown in bills for deduction eligibility.
- The Court upheld the Tribunal's decision, confirming the non-includibility of sales tax in the taxable turnover.

2. Taxability of turnover of empty gunnies:
- The Tribunal had directed the deletion of the turnover of empty gunnies for one of the assessees.
- However, citing a Supreme Court decision, the Court ruled that turnovers relating to the sales of empty gunnies were taxable.
- The Tribunal's view that the turnover of empty gunnies should not be included in the taxable turnover was deemed incorrect and set aside.

Conclusion:
The Court upheld the Tribunal's decision regarding the non-inclusion of sales tax collections in the taxable turnover. However, the ruling on the turnover of empty gunnies was overturned based on the Supreme Court precedent. The judgment provided detailed analysis, referencing relevant legal instructions and past cases to support the decisions made.