TMI Blog2014 (5) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the bill for administrative convenience, by itself, would not be a ground for granting the relief. Works contract turnover, hence deemed sale, and the divisibility of the consideration is worked out statutorily as under Section 3-B of the TNGST Act, 1959 - Break-up of the consideration and the tax thereon is shown under various heads in the books of accounts of the assessee - That apart, there is hardly any material to find, on which portion of the consideration, the assessee really collected the tax payable under the Act – It is not agreed that the mere fact of distribution under different heads in the amounts would qualify for deduction under the Act, or for that matter, no tax would be charged – Therefore, no hesitation in confirming the order of the Tribunal - The Tax case Appeals stand dismissed – Decided against assessee. - Tax Case (Appeal) Nos.1218 and 1242 of 2006 - - - Dated:- 19-9-2011 - Chitra Venkataraman And M. Jaichandren,JJ. For the Appellant : Mr. C. Venkatraman For the Respondent : Mr. R. Sivaraman Special Government Pleader (Taxes) ORDER The assessee is on revision as against the order of the Tribunal, raising the following substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchasers, the mere fact that they had been shown separately in the accounts could not be a justifiable ground for granting exclusion. 4. The assessee filed an appeal before the Appellate Assistant Commissioner, wherein it failed. Hence, further appeal was filed before the Tribunal. As far as the said contention is concerned, the Tribunal once again rejected the case of the assessee. Thus, the assessee is now before us on revision. 5. Learned counsel appearing for the assessee, pointing out to the definition of "turnover" under Section 2(r) of the Tamilnadu General Sales Tax Act, 1959, submitted that the assessee had specifically mentioned about the tax portion on 70% of the agreed amount, thereby indicated that the tax collected was not part of the turnover. As such, there could be no levy of tax on the tax collected . In other words, the assessee contended that the tax on the turnover of 70% of the contract merited exclusion from the turnover. Consequently, the question of the Assessing Officer placing reliance on Explanation (1-A) to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, does not arise. He insisted that going by the decision of the Kerala High Court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intained, the assessee adopted a safer statutory formula to offer 70% of the amount collected as taxable turnover under Section 3-B of the Tamil Nadu General Sales Tax Act, 1959. By adopting the said formula, the assessee offered Rs.6,20,63,196/- as the turnover, in which the assessee had also included the tax. The tax thus collected on the said turnover is split up as is evident from the books of accounts. In considering the said claim that the assessee had shown it separately in the accounts, the Officer concerned pointed out that even though the works contract transactions could not be equated to direct sales, yet, the fact that the assessee had offered the price inclusive of tax, really showed that the consideration agreed was a sum total inclusive of tax. With no specific value assigned as referable to consideration relating to materials and labour charges, the question of deducting tax as referable to material value as per Explanation (1-A) to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959, does not arise. 10. Further, the Assessing Officer pointed out that all that the assessee had done in this case was to show that the tax element was shown in the accounts jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price charged. The consolidated amount charged is stated to include the tax element. Even for claiming deduction on the labour charges, the assessee adopted the statutory percentage only. In the above circumstances, on a consolidated sum thus charged, it is difficult to accept the claim of the assessee that the adjustment entries given in the accounts have to be taken as tax charged separately. In the decision reported in [2010] 34 VST 273 (SC) (India Meters Ltd. Vs. State of Tamil Nadu (SC)), following the earlier decisions of the Apex Court, the Apex Court held as follows: "It is no doubt true that rule 6(c) of the Rules permits deduction of the cost on freight while determining the taxable turnover. However, that provision must be read in the context of definition of "turnover" as also the definition of "sale" in sections 2(r) and 2(n) respectively of the Act. "Turnover" is defined in the Act, inter alia, to mean "the aggregate amount for which goods are bought or sold or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n)"." The Apex Court further pointed out that "even if freight and insurance charges are shown separately in the Bil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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