TMI Blog2015 (1) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... orm part of the subject matter of the contract between the Respondent and its buyer were in a specific and deliverable state - The transfer of property in the goods in pursuance of the sale contract takes place against the payment of the price of goods - The delivery of the goods is effected by the seller to the buyer and the obligation under law to obtain registration of the motor vehicle is cast upon buyer - The service of facilitating the registration of the vehicle which is rendered by the seller-assessee is to the buyer and in rendering that service, seller acts as an agent of the buyer - The handling charges for this service cannot form part of sale price - Thus, taking overall view of the matter it is clear that the sale price does not include airtime charges and/or license fees – thus, sale price will be restricted to that of the hardware, namely, pager units and will not include the cost of airtime and license fees - the tribunal was justified in holding that airtime charges and license fees charged under the contract for selling activated pager do not form part of the sale price – Decided against Revenue. - Sales Tax Reference No. 3 of 2005 - - - Dated:- 24-9-2014 - S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rajasthan (1979) 43 STC 13 and claim to have applied the test set out in the said judgment, namely, that of consideration passing from the purchaser to the dealer for the sale of goods. That it is immaterial to enquire as to how the amount of consideration is made up, whether it included excise duty or sales tax or freight. The only relevant fact to be ascertained is as to what amount is payable by the purchaser to the dealer as consideration for the sale. 4. The Respondent in the instant case submitted that it had distinct agreements for providing of air time and for sale of hardware. In support of this contention the Respondent have produced a copy of the order form on record wherein separate prices were made for the equipment and the service. According to the Applicant, there cannot be separate agreement for each of them and the pager is of no use if it is not equipped with the facility of service. Once the pager is sold, the purchaser becomes a permanent customer for future service. Later on the purchaser pays only for service. 5. The Assistant Commissioner of Sales Tax concluded that the charges for airtime alone cannot be subject matter of sales tax. He relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchaser. The amount of money which goes from the pocket of the vendee to the pocket of the vendor as a condition or consideration for passing of the property in the goods is thus the sale price and not the tax. It is the amount, but for the payment of which, the vendor would not transmit his title to the goods in favour of the vendee, and not any amount paid by the vendee towards any tax liability incurred by him on making the purchase of the goods. It is no doubt true that a dealer as a prudent businessman would pass on the burden in the context of the sales tax liability to the buyer. But then he would be doing so in order that he may not make a loss on the transaction. Inasmuch as no businessman carries on business with a view to incur loss, that he would take into account this factor at the time of collecting the sale price from the vendee stands to reason. Mr.Sonpal therefore submits that the question referred must be answered in the negative and in favour of the Revenue and against the assessee. 8. The Respondent dealer has not appeared before this court and we do not have the benefit of hearing any submission on behalf of the Respondent. The senior members of bar Mr.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing to the radio pager at the time of or before its delivery. It merely collects airtime charges and license fees prorata nothing is done by the dealer in respect of goods at the time of or before delivery thereof and airtime charges are paid in respect of airtime radio paging services which is activated after the pager is purchased and/or after delivery of the pager. Nothing is required to be done in respect of pager unit itself at the time of such activation. However, what is done is to authorise radio frequency network to access the pager after it is sold to the subscriber. In other words, pager is service activated in respect of the pager sold to the purchaser. This sale of the pager is a stand alone transaction. The activation of the pager comes subsequent to the incidence of sale. The license fee payable is a necessary corollary and neither the collection of airtime charges nor license fees will constitute anything done in respect of the pager. Thus, it cannot be said that payment of airtime charges and license fees can be included in the sale price. 11. A simple test can be applied to ascertain, the correct position. If after purchasing the pager, the subscriber were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g services rendered cannot be included in the cost of the pager for the purpose of taxation and that the tribunal has correctly reached the conclusion. 14. It is also useful to refer to the judgment of State of Karnataka vs. Bangalore Soft Drinks Pvt. Ltd. (2000) 117 STC 413 (SC) wherein the Respondent has effected sales exworks and had also undertaken transport of the goods to the place of the buyer. The goods were transported in the vehicles of the Petitioners only. However, the High Court of Karnataka held that the transfer of the property in the goods takes place at the factory gate of the Petitioner and the subsequent transportation undertaken by the Petitioner was for and on behalf of the Petitioner as his agent. The obligation of transportation was construed to be as separate contract and therefore, the freight charges cannot be included in sale price of the goods. 15. Furthermore, it may be noticed that in Sales Tax Appeal No.5 of 2011 a Division Bench of this Court had an occasion to consider whether the Maharashtra Sales Tax Tribunal was correct in setting aside the tax on the handling charges or service charges for registration of motor-cycles and interest thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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