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2023 (1) TMI 1134 - HC - VAT and Sales TaxLevy of Sales tax liability - Transportation charges/freight charges - freight charges forms part of the “sale price” as per Section 2(xlviii) of the JVAT Act or not - the claim of the revenue is that separate invoices for transportation cost would not be a ground to deduct from the total GTO and that there is no illegality in the order of the tax authorities - HELD THAT:- It appears that in the present facts of the case the Petitioner performs a dual role, one as the seller of the goods and other as carrier of the goods, having collected freight charges separately from the buyer. Clause (3) of the purchase order (Annexure-4 series) specifically indicates that the freight will be payable at actual; meaning thereby, the price of the goods is not inclusive of the transportation cost/freight. The freight charges were recovered by the petitioner in the capacity as carrier of the goods and did not form part of the sales turnover of the petitioner. Even as per purchase order if the goods are delivered to SMD Jamshedpur, the same needs to be delivered free of delivery charges. Thus, the real intention can also be gathered by the Act of the seller and buyer. After going through the orders passed by the tax authorities it appears that the tax authorities as well as the learned tribunal misdirected themselves in reading only Explanation-II to Section 2(xlviii) of the JVAT Act and ignored Explanation-III which categorically indicates that the sale price shall not include the cost for transport of goods from the seller to the buyer provided such cost is separately charged to the buyer. Thus the orders of tax authorities as well as the learned tribunal suffer from illegality and incorrect application of the provision of the JVAT Act to the facts of the present case. The matter is remitted back to the Deputy Commissioner of Commercial Taxes, Singhbhum Circle, Jamshedpur to pass a fresh order on the claim of the petitioner to the extent it relates to freight charges realized by the petitioner from its purchasers and shown and charged separately in the invoices after considering the materials and after hearing the petitioner - Application allowed.
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