TMI Blog1983 (1) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... transport charges incurred by him were prior to delivery of goods to the purchaser. Thus transport charges would form part of sale price in the instant case. In this connection, decision of the Honourable Supreme Court in Dyer Meakin Breweries Ltd. v. State of Kerala [1970] 26 STC 248 (SC) and D.C. Johar Sons (P.) Ltd. v. Sales Tax Officer, Ernakulam [1971] 27 STC 120 (SC) may be cited to arrive at a definite conclusion. It is held by the Honourable Supreme Court in the case of Dyer Meakin Breweries Ltd. v. State of Kerala [1970] 26 STC 248 (SC) that all the expenditure incurred by the appellant towards freight and handling charges was incurred prior to the sale and was a component of the price for which the goods were sold and the appellant was not entitled to the deduction claimed. It is further observed by the Honourable Supreme Court keeping in view the provisions under rule 9(f) of the Kerala General Sales Tax Rules, 1963, that- 'It is not intended to exclude from the taxable turnover any component of the price, expenditure incurred by the dealer which he had to incur before sale and to make the goods available to the intending customer at the place of sale.' In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealer when such cost is separately charged." The Orissa Act 3 of 1976 has, therefore, taken the words from the definition of "sale price" and has put them as admissible deduction from taxable turnover. There is no dispute that sales tax is payable on the taxable turnover and taxable turnover is arrived at by deducting the admissible items as provided in section 5(2)(A) of the Act from the gross turnover. The assessing officer relied upon two decisions of the Supreme Court to come to his conclusion against the assessee. The first case is that of Dyer Meakin Breweries Ltd. v. State of Kerala [1970] 26 STC 248 (SC). The assessee there was a manufacturer of liquor and the manufacture was carried at various places in U.P. and Haryana States, transported from the breweries and distilleries to its place of business in Ernakulam and sold there. When selling the liquor to the customers, the assessee made separate bills for ex-factory price and for freight and handling charges. It claimed that the amount charged for freight and handling charges incurred by it in transporting the goods from the breweries and distilleries to the warehouse at Ernakulam had to be deducted under rule 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.C. Johar Sons (P.) Ltd. v. Sales Tax Officer, Ernakulam [1971] 27 STC 120 (SC). The assessee there was a dealer in foreign liquor but was not a producer or manufacturer thereof. It purchased goods in other States and transported them to its place of business in Ernakulam and claimed exemption of freight and packing and delivery charges by raising separate bills for those items while selling the goods in Ernakulam. The court applied the same principle as in the aforesaid case and held that no support was available for the claim. Apart from these two authorities, the learned standing counsel relied upon a later decision of the Supreme Court in Hindustan Sugar Mills Ltd. v. State of *Here italicised. Rajasthan [1979] 43 STC 13 (SC); AIR 1978 SC 1496, where the court took the view that where the sale of a commodity by the producer was governed by a Control Order under the scheme of which the freight was to be paid by the producer and then was to be recovered from the purchaser, the amount of freight formed Part of the "sale price" notwithstanding any term or condition of the contract between the producer and the purchaser to the contrary. In such a case, when the producer paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtz and limestone. He is also a registered dealer under the Orissa Sales Tax Act and has been allotted registration No. RL-1738. He supplied mineral ores like dolomite, etc., to the Steel Authority of India during 1977-78. He filed his return and paid tax along with the return amounting to Rs. 66,680.47. 2.. The contract between the petitioner and the Steel Authority of India specifically stipulates that besides the sale price, the Steel Authority of India would pay separately the cost of transport involved in transporting the minerals, that is, dolomite, quartz and limestone, from the pit-head to the plant site of the Steel Authority of India. The place of delivery indicated in the contract is "f.o.r. pit-head". Pursuant to this provision in the contract, the petitioner billed the Steel Authority of India for the price of the goods sold and also separately for the transport charges. Two specimen bills have been annexed to this writ petition as annexures 2 and 2/1. 3.. In the course of assessment for the year 1977-78, that is for the period 1st April, 1977 to 31st March, 1978, the opposite party by his order of assessment dated 30th October, 1978, held that a sum of Rs. 7,75, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment Act of 1976. He has concluded therefrom that "sale price" would include the cost of freight. This is clear from the following passage extracted from his order: ........"In order to arrive at this point we shall have to make a reference to the definition of 'sale price' as incorporated in the O.S.T. Act, 1947, since sales tax is leviable on the sale price 'of a completed sale'. 'Sale price' as defined under section 2(h) of the O.S.T. Act means 'the amount payable by a dealer as consideration for the sale or supply of any goods, less any sum allowed as cash discount according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before, delivery thereof'. This is the present definition and earlier to this there was a further provision after the word 'delivery' there was 'other than the cost of freight paid or cost of installation when such cost is separately charged' (sic). This part of the definition has been deleted with effect from 1st June, 1976. On an analysis of the definition of 'sale price' it would be seen that there would have been absolutely no dispute in allowing the deduction on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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