TMI Blog1997 (12) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales by the petitioner-company were through the Director-General of Supplies and Disposals to various Government and public sector corporations and companies. The abovesaid sales were to be effected as per the provisions of the Cement Control Order, and also under the agreement between the petitioners and the DirectorGeneral of Supplies and Disposals (DGS D). The purchasers under the agreement were to pay the sales tax on the cement supplied. The question therefore that had arisen in this connection is, as to whether the freight for the transport of the cement would form a component of the sale price of the cement, and consequently therefore, whether it would be includible in the turnover of taxable sales for levying sales tax under the Gujarat and Central Acts. It is clear that, in view of the judgment of the apex Court in the case of Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1969] 24 STC 487, freight did not form part of the price, and therefore sales tax was not payable on the freight element. According to the petitioner-company, relying upon the said decision the DGS D had not paid sales tax to the petitioner on the freight element of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first question which arises for our consideration therefore is, as to whether the respondent-authorities were justified in levying penalty on the petitioner-company on the ground that, they have failed to pay the demand in respect of outstanding of the sales tax dues. As indicated by us earlier, the case of the petitioner-company is that, under the earlier Supreme Court pronouncement, namely Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1969] 24 STC 487 they were not required to take into consideration the freight element while deciding and showing the price of the cement sold, and thereafter the amount of the sales tax to be paid. But according to them, the entire position had taken a somersault because of the pronouncement of the Supreme Court in the case of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13. 7.. When a reference is made to the abovesaid two pronouncements of the Supreme Court, it is apparently clear that the petitioner-company is perfectly justified in saying that, under the previous decision of the Supreme Court the freight element was not required to be taken into consideration while deciding the turnover by way of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner-company could be said to be guilty of not paying the sales tax within the prescribed time-limit without a reasonable cause. In our opinion, the non-payment or the delay in payment in fact has been occasioned because of the changed view of the Supreme Court. Under the earlier decision, as pointed out by us, the freight element was not to be taken into consideration as part of the price and therefore the sales tax was not made payable on the freight element. Later on, under the changed view of the Supreme Court, this element, namely the freight element has been accepted as a component or the part of the price. The assessee in our opinion would be having a belief based upon the earlier Supreme Court decision that the freight element is not to be taken into consideration while deciding the price and therefore, the turnover. The question may arise as to how would you define a reasonable cause? The answer shall have to be provided on the basis of the ordinary meaning which could be given to a reasonable cause . A cause could be said to be a reasonable cause when the same is able to appeal to the reason or a conscience. It might be a conscience of a dealer or a conscience of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, it is apparent that the Act came to be amended and sub-section (4A) making the provision for the interest came to be inserted in the Act by this Act No. 10 of 1976 with effect from April 1, 1976. In other words, under the provisions under which the case of the petitioner was required to be considered for the abovesaid period, namely, between January 1, 1970 and year 1975 there was absolutely no provision regarding the interest. If this were to be the position, in our opinion, for the abovesaid years, the interest could not have been imposed and demanded. 12.. There was an endeavour on the part of learned counsel Mr. Prashant Desai appearing on behalf of the Revenue for contending that, when the statute stands amended and there has been specific provisions duly inserted under the amendment for levying and recovering of the interest, the petitioner is not justified in making a grievance in this respect before us. We must admit that, we are not in a position to entertain even for a while the abovesaid contention coming from learned counsel Mr. Desai for the Revenue. It should not be overlooked that at the relevant time there was absolutely no provision for the levy, collection a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me on the statute book with effect from April 1, 1976 could be utilised for the purpose of levying and collecting interest for the years during which there was absolutely no provision for the interest. 14.. Moreover during the scrutiny of the amended provisions, learned counsel Mr. Desai was not in a position to point out that, there are retrospective or retro-active in operation either in express terms or by necessary implications. In view of all these, the contention coming from learned counsel Mr. Kaji shall have to be accepted that it was not open for the Revenue to ask for the interest for the aforementioned period. 15.. Learned counsel Mr. Kaji wanted to go a step beyond and urge that, even after April 1, 1976 the interest on the outstanding could not be demanded and collected. In our opinion, this question does not fall for our consideration simply because the demand in question is limited up to the year 1975. Because of this, in our view the question which is not relevant for the purpose of decision of the present petition, does not require our attention and decision. We do not express any opinion on this advanced part of argument coming from learned counsel Mr. Kaji fo ..... 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