TMI Blog1991 (8) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 STC 13, and held that "the freight and handling charges in respect of the cost of transportation of goods before delivery of the goods will form part of sale price". In the instant case, the delivery of the goods was found to be on f.o.r. basis. Therefore, the expenses incurred before the goods were given to the common carrier would become part of the sale price. The Appellate Tribunal, further observed that: "...........unless there is an indication that the consignee requires that the transportation should be done by the consignor, it has been agreed that there is no agreement between the parties, nor implied agreement could also be derived from the sale bills issued to the effect that the loading charges are not intended to be sale price. As the delivery of the goods takes place immediately after the goods are loaded to the common carrier, the expenses in connection with the goods sold before such delivery will become part of the sale price." These quoted observations were actually made by the first appellate authority. 2.. The learned counsel for the petitioner referred to the definition of "turnover" under the Central Act, read with the definition of "sale price" in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immaterial to enquire as to how the amount of consideration is made up, whether it includes excise duty or sales tax or freight. The only relevant question to ask is as to what is the amount payable by the purchaser to the dealer as consideration for the sale and not as to what is the net consideration retainable by the dealer." Again at page 29 of the same decision, the Supreme Court observed: "We may then take a case where a dealer transports goods from his factory to his place of business and sells them at a price which is arrived at after taking into account 'freight and handling charges' incurred by him in transporting the goods. The amount of 'freight and handling charges' included in the price would obviously be part of the 'sale price', because it would be payable by the purchaser to the dealer as part of the consideration for the sale of the goods. The same would be the legal position even if the 'freight and handling charges' are shown separately in the bill and added to the price of the goods, for the character of the payment would remain the same. Since 'freight and handling charges' represent expenditure incurred by the dealer in making the goods available to the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid' but 'freight to pay'. But he may, ordinarily as a reasonable businessman he would, accept such railway receipt and pay the amount of freight on behalf of the dealer. When the purchasers pay the amount of freight in such a case, it would be as part of the agreed price and not as freight vis-a-vis the dealer. The amount of freight paid by the purchaser and shown in the bill as deducted from the agreed price would, therefore, clearly form part of 'sale price' and fall within the first part of the definition." Thereafter, another situation is considered, in which the contract of sale may not be f.o.r. destination railway station, but the price alone may be so. In this situation, the contract does not have all the incidents of a f.o.r. destination railway station contract, but merely the price is stipulated on that basis and the terms of such a contract may provide that the delivery shall be complete when the goods are put on rail and thereafter it shall be at the risk of the purchaser and that such a stipulation would make the railway agent of the purchaser for taking delivery of the goods. Here, the price of the goods receivable by the dealer would be the f.o.r. destination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount payable to a dealer as consideration for the sale of any goods less any sum allowed as cash discount......To this content of the consideration for the sale has to be added as per the second part of the definition "any sum charged for anything done by the dealer in respect of the goods at the time or before the delivery thereof". However, from the second part, the cost of freight or delivery or the cost of installation is to be excluded, in case where such cost is separately charged. 7.. This definition has two main parts, the first part covering the consideration for the sale and the second part covering other charges for anything done by the dealer in respect of the goods at the time of or before the delivery thereof. The exclusory words, exclude the cost of freight or delivery only, in case, the second part of the definition is attracted. After referring to the second part of the definition, the Supreme Court observed at page 35: ".........Not all sums charged for something done by the dealer in respect of the goods at the time of or before the delivery thereof are covered by the inclusive clause. The cost of freight or delivery or the cost of installation certainly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale has to be considered with reference to the first part of the definition of 'sale price' in section 2(h) of the Central Act. In case the cost of freight or delivery is invariably part of the sale consideration, then no further question would arise. However, in a case where the cost of freight or delivery is included by the dealer not in his capacity as the seller, but, as a matter of convenience and on behalf of the purchaser, and it is independent of the cost element of the goods in question for the seller, then the second part of the definition would be attracted; in which case, applicability of the exclusory words has to be examined. 8.. In the instant case, the Appellate Tribunal had not the benefit of the assistance of the petitioner's counsel; it is said by the. petitioner, that its counsel could not be present at Gulbarga when the appeal was taken up for hearing by the Appellate Tribunal. The question raised by the parties involves investigation of facts in the light of the decision of the Supreme Court in Hindustan Sugar Mills Ltd. case [1979] 43 STC 13. 9.. The learned counsel for the petitioner sought to distinguish the said decision, by pointing out that in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
