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2017 (10) TMI 490 - HC - VAT and Sales TaxValuation - Interpretation of Statute - clause (29) of section 2 of the Bombay Sales Tax Act, 1959 and clause (h) of Section 2 of the Central Sales Tax Act, 1956 - insurance charges and carrying charges - includibility - whether insurance charges and carrying charges forms part of sale price - Whether on the facts and in the circumstances of the case and on a true and correct interpretation of clause (29) of section 2 of the Bombay Sales Tax Act, 1959 and clause (h) of Section 2 of the Central Sales Tax Act, 1956, the Tribunal was justified in law in holding that the insurance charges and carrying charges do not form part of the sale price? Held that: - Section 19 of the Sale of Goods Act, 1930, deals with the property passes when intended to pass - The passing of the property in goods depends upon the intention of the parties, as is evident from the terms of the contract, the conduct of the parties, and the circumstances of the case. Under subsection (3) of Section 19, unless a different intention appears, the rules contained in Sections 20 to 24 are the rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. It is thus, the transfer of right to use the goods is deemed to be sale of goods, attracting the incidence of tax. In the present case, passing of the property in goods to the buyer is at the place and time of spot delivery. After the sale is complete, even if the assesseesellor retains the possession of the goods sold and incurs the expenditure of insurance and carrying the goods at the destination of the buyer, he performs these functions in his capacity as a 'bailee', as contemplated by Section 148 of the Indian Contract Act, 1872, who shall be entitled to reimbursement of such expenses from the 'bailor', as specified under Section 158 therein. Such charges of insurance and carrying incurred by the assesseesellor cannot, therefore, constitute a 'sale price' within the meaning of Section 2(29) of the BST Act. The Tribunal was justified in holding that the insurance charges and carrying charges do not form part of the sale price for the reason that the sale was completed at the point of spot delivery and the insurance and carrying charges were incurred thereafter - question is answered in the affirmative - decided against Revenue.
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