1998 (11) TMI 621 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether insurance charges for the transport of goods form part of the dealer's turnover under the U.P. Sales Tax Act, 1948.

Analysis:
The revision petitions under section 11 of the U.P. Sales Tax Act, 1948 were filed against a common order passed by the Sales Tax Tribunal, Ghaziabad. The dispute revolved around whether insurance charges for transporting goods to the buyer's destination should be included in the dealer's turnover. The dealer, a manufacturer of asbestos sheets, argued that separately billed insurance charges should not be considered part of turnover. However, the Tribunal held that these charges, being a percentage of the goods' value, form an inseparable part of turnover as defined in the U.P. Sales Tax Act.

In the case law referenced, it was noted that insurance charges realized from customers may or may not form part of the turnover, depending on the specific circumstances. While the dealer relied on judgments excluding certain charges from turnover, the court emphasized that insurance charges related to safeguarding goods during transport constitute an expenditure linked to transportation. The court concluded that insurance charges, whether paid before or after payment to the insurance company, should not be included in turnover. Consequently, the Tribunal's order was set aside, and the appeals were directed to be disposed of in accordance with the judgment.

In summary, the judgment clarified the treatment of insurance charges for transporting goods in the dealer's turnover under the U.P. Sales Tax Act, 1948. It underscored the distinction between charges directly linked to delivery and those associated with safeguarding goods during transport. The decision emphasized that insurance charges aimed at protecting goods in transit should not be considered part of turnover, aligning with previous judgments excluding certain charges from turnover calculations.