TMI Blog1973 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... amount on the turnover and gave a deduction of Rs. 4,87,115. The depreciation was calculated as per straight line method. It should be noted, however, that the opponent-firm had claimed depreciation at the rate of 25 per cent per annum. The opponent firm, therefore, took the matter in appeal before the Assistant Commissioner of Sales Tax. It contended in the said appeal that the depreciation should have been allowed at the rate of 25 per cent as available under the Indian Income-tax Act. The second contention was that the interest and service charges should not have been included in the turnover as well as the additional interest charged for the late payment ought to have been further excluded. The Assistant Commissioner of Sales Tax rejected all these contentions by his order of 31st July, 1970. The opponent-firm, therefore, took the matter in second appeal before the Gujarat Sales Tax Tribunal. The Tribunal, for purposes of determining the sale price, relied on the decision of the Supreme Court in K.L. Johar and Co. v. Deputy Commercial Tax Officer, Coimbatore III, and Others(1). It appears that the Tribunal was impressed with the illustration given in K.L. Johar's case(1) and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period commencing from 1st January, 1960, to 29th July, 1963, as a dealer in motor vehicles. Being aggrieved with this order, the opponent-firm took the matter before the Assistant Commissioner of Sales Tax where the question of the depreciation only was raised. Though the Assistant Commissioner partially allowed the appeal, he did not accept the claim of the opponent-firm that the depreciation at the rate of 25 per cent on trucks and 20 per cent on cars should be allowed to be deducted. The opponent-firm, therefore, took the matter in second appeal before the Tribunal. One of the contentions before the Tribunal was that the Sales Tax Officer has erred in granting depreciation at the rate of 12 per cent on trucks and 10 per cent in the case of cars and on the principle of the earlier decision of the Tribunal in M/s. Premraj Ganpatram Finance Department v. State of Gujarat, Second Appeal No. 258 of 1970 decided on 29th January, 1971 (out of which Sales Tax Reference No. 4 of 1972 has arisen), the depreciation at the rate of 25 per cent should have been allowed. The Tribunal accepted the contention of the opponent-firm, which was the appellant before it, and allowed the depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was Rs. 5,000 in the example given above by us)." However, the Supreme Court, after following the decision in Darngavil Coal Company v. Francis[1913] 7 Tax Cas. 1., held as under: "This case in our opinion brings out the true nature of the payment made as hire in hire-purchase agreement. Part of the amount is towards the hire and part towards the payment of price, and it would be for the sales tax authorities to determine in an appropriate way the price of the vehicle on the date the hirer exercises his option and becomes the owner of the vehicle after fulfilling the terms of the agreement. There is no legislative guidance available as to how this should be done and perhaps it would be better if the Legislature gives guidance in such matters. But even in the absence of legislative guidance it would be for the sales tax authorities to decide as best they can the value of the vehicle on the date the option is exercised, and the property passes to the hirer. There may be two ways of doing it. The sales tax authorities may split up the hire into two parts, namely, the amount paid as consideration for the use of the vehicle so long as it was the property of the owner, and the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence which included the claim of the assessee, the figures worked out at different rates for depreciation on the price of the vehicle, the other material in that connection placed on the record before the taxing authorities and also the rate of depreciation that worked out in the illustration before the Supreme Court in the above referred case. Now, we must state frankly that we are not at all impressed by this contention of Mr. Mody for the simple reason that in the order of the Tribunal, we have not found in the discussion as to the evidence on the basis of which the Tribunal reached the conclusion that the rate of 25 per cent would be a reasonable rate of depreciation in the particular case before it. Not only there is no discussion but there is no finding to that effect, either made expressly or which we can spell out impliedly from reading the order as a whole. On the contrary, we are of the opinion that the Tribunal has ruled, as if the rate of 25 per cent is a reasonable rate of depreciation for vehicles such as trucks in hirepurchase agreements for purposes of determining the sales tax liability. It should be noted that on behalf of the opponent-firm it was urged before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they, as reasonable men, could come to the conclusion to which they have come; and this is so, even though the High Court would on the evidence may come to a conclusion entirely different from that of the Tribunal. It is also true, as held in Sree Meenakshi Mills Limited's case(1), that when a conclusion has been reached on an appreciation of a number of facts established by the evidence, whether that is sound or not must be determined, not only by considering the weight to be attached to each single fact in isolation but by assessing the cumulative effect of all the facts in their setting as a whole. In other words, it is an established position of law that the jurisdiction of the court in a reference is not to disturb a finding of pure fact arrived at by the Tribunal unless on the ground that there is no evidence whatsoever to support it or that it is perverse. As stated by us above, we have not been pointed out any part of the order where the Tribunal has discussed the evidence; much less it reached the conclusion on legal evidence, which can be said to have been established by facts. As stated by us above, the Tribunal was very much impressed by the rate of depreciation, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reversed. We have not been able to appreciate how this decision can be of any use to the case of the opponent-firm here as pressed into service by Mr. Mody. In that case before the Supreme Court, the Tribunal was convinced about the veracity of the statement of the assessee and reached its conclusion that the amount sought to be taxed was not from undisclosed sources, but was a regular income which could not be taxed as was sought to be done by the Income-tax Officer. As stated by us, in the present case, there is no discussion about the evidence, nor any conclusion reached as a result of the appreciation of such evidence. To repeat, what has been done by the Tribunal is to adopt and apply mechanically a rate of depreciation, which worked out in a particular illustration before the Supreme Court in K.L. Johar's case[1965] 16 S.T.C. 213 (S.C.). It is not only held that the rate of depreciation, namely, 25 per cent was reasonable as far as the opponent-firm in Sales Tax Reference No. 4 of 1972 was concerned, but on a reading of that part of the order of the Tribunal it appears clearly that the Tribunal laid it down, as a matter of principle for which, to say the least, there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be answered as follows: "On the facts and in the circumstances of the case, the Tribunal was justified in determining the sale price in case of hire-purchase transactions as the hire-purchase value which is composed of real price of the vehicle and the amounts of interest on that price, finance service commission and extra interest for late payment of hire-purchase instalments." In Sales Tax Reference No. 3 of 1972, the Tribunal has merely followed its earlier decision in M/s. Premraj Ganpatram Finance Department v. State of Gujarat, Second Appeal No. 258 of 1970 before it, decided on 29th January, 1971 (out of which Sales Tax Reference No. 4 of 1972 has arisen). It appears that the Tribunal has allowed depreciation at the rate of 20 per cent as far as cars were concerned, having regard to the nature of the said vehicles. For the same reasons, which we have discussed above, there was no evidence worth its name before the Tribunal to justify the finding of allowing the aforesaid rates of depreciation for different classes of vehicles. On the contrary, it has followed its own decision in M/s. Premraj Ganpatram Finance Department's case, referred to hereinabove, which in its tu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
