TMI Blog1978 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of the contract. The assessee would contend that it was "firewood" assessable at 1 per cent under item 55 of the First Schedule of the Kerala General Sales Tax Act, 1963, read with section 5(1) thereof. On the other hand, the revenue would contend that what was sold was not "firewood" but something other than the same-whether timber or not-assessable at the residuary rate of 3 per cent (during the relevant years in question) under section 5(2) of the Act. The Tribunal has written a very long order discussing several decisions and various considerations. There was difference of opinion among the members of the Tribunal, the Chairman and the Departmental Member holding against the assessee, that the contract was not for "firewood" but f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties had passed the commodity as firewood; and that neither the debarking of the wood nor the specifications added to the supply of the article, nor the use, if any, to which the article was put, for serving as raw material for the factory, can change the commodity into something other than what was the subject-matter of the contract between the parties. Before us, counsel for the revenue did stress to some extent at least that it was improper and unlikely that a factory, like the Gwalior Rayons Pulp Factory, would have required such a considerable amount of firewood, whereas, as a factory engaged in the production and manufacture of rayon pulp, it was more easily understandable that its requirement was "murukku" for the purpose of manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider the question, taking on record, in accordance with law, all the necessary documents relating to the contract and the dealings and the conduct of the parties which throw light on the subjectmatter of the bargain and the contract between the parties, and proceed to deal with the question in the light of the observations contained in this judgment. 5.. There is a second controversy that has been agitated in Tax Revision Cases Nos. 65 and 66 of 1976, with respect to the assessment years 1969-70 and 1970-71. That relates to the exemption from sales tax, under rule 9(f) of the Kerala General Sales Tax Rules, of the transport charges incurred by the assessee in respect of the article that was the subject-matter of the contract between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the transport was prior to the sale. This was what the court observed: "It is common ground that the sale of the liquor took place in Ernakulam. The company arranges to transport liquor for sale from the factories to its warehouse at Ernakulam. It was not brought for any individual customer. All the expenditure incurred is prior to the sale and was evidently a component of the price for which the goods were sold. It is true that separate bills were made out for the price of the goods ex factory and for 'freight and handling charges'. But, in our judgment, the Tribunal was right in holding that the exemption under clause (f) of rule 9 applies when the freight and charges for packing and delivery are found to be incidental to the sale an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat case had extracted limestones and transported the same to the buyer's place of business in pursuance of the agreement of sale entered into by it which specifically provided for the price of the limestones at the place of extraction and also for the supply and delivery charges payable to the buyer. In such circumstances, the Madras High Court upheld the claim for deduction in relation to the supply and delivery charges. We think the decision is appropriate and must govern the facts of this case. 6.. We are of the opinion, that in T.R.C. Nos. 65 and 66 of 1976, the assessee's claim to deduction in respect of transport charges must be upheld. We do so; and for determining the main question in regard to the nature and the subject-matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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