TMI Blog2014 (8) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... id separately in their account books. They are therefore entitled to the benefit of exclusion of tax component from the total turnover even in terms of Rule 5-B (a) of the TNGST Rules - in the explanation, the intentment of the statute is that any amount charged by the dealer by way of tax separately, without including the same in the price of the goods bought or sold, shall not be included in the turnover. This is to mean that tax collected will not be included in the turnover. There is no specification or indication in Explanation (1-A) that tax collected should be shown separately in the bill and only then it shall be excluded in the turnover. Revision dismissed. - T.C. (R) NOS. 19 TO 24 OF 2014 - - - Dated:- 27-8-2014 - MR. R.SUDHAKAR AND MR. G.M.AKBAR ALI, JJ. For Petitioner : Mr.Manoharan Sundaram, AGP ORDER R.SUDHAKAR, J. The above tax revisions are preferred by the Department aggrieved against the orders passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai in T.A. Nos.147/05, 148/05, 168/05, 129/08, 141/08 and 109/09. 2. The respondent in these cases is a dealer in readymade garments and general goods and an assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harging the cost of goods including sales tax, surcharge, etc., and in their sale bills, taxes were not shown and collected separately on the cost of the goods. Hence, following the Explanation (1-A) to Section 2 (r) of the TNGST Act, 1959, the Assessing Officer had disallowed the claim of exemption as sales tax collection on ₹ 45,77,730/= and assessed the turnovers to tax. On appeal, the first appellate authority had dismissed the appeal for the reasons stated thereon. Hence, aggrieved, the appellants preferred this present appeal. TA 148/2005 (2003-04) (TNGST) : The appellants were originally assessed on a total and taxable turnover of ₹ 10,95,61,063/= and ₹ 10,91,73,678/= respectively for the assessment year 2003-2004 under the TNGST Act, 1959, in the proceedings dated 30.6.2004. In this year also, the verification of the sale bills and sales registers revealed that the dealer had sold goods by charging the cost of goods including sales tax, surcharge, etc., and in their sale bills, taxes were not shown and collected separately on the cost of the goods. Hence, following the Explanation (1-A) to Section 2 (r) of the TNGST Act, 1959, the Assessing Officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons stated thereon. Hence, aggrieved, the appellants preferred this present appeal. TA 109/2009 (2006-2007) (TNGST) : The appellants were originally assessed on a total and taxable turnover of ₹ 15,84,78,660/= and ₹ 15,43,79,435/= along with re-sale turnover of ₹ 38,75,238/= as against the reported total and taxable turnover of ₹ 15,14,65,866/= and ₹ 14,73,66,643/= along with re-sale turnover of ₹ 38,75,238/= respectively for the assessment year 2006-2007 under the TNGST Act, 1959, in the proceedings dated 29.06.2007. In this year also, the verification of the sale bills and sales registers revealed that the dealer had sold goods by charging the cost of goods including sales tax, surcharge, etc., and in their sale bills, taxes were not collected separately on the cost of the goods. Hence, following the Explanation (1-A) to Section 2 (r) of the TNGST Act, 1959, the Assessing Officer had disallowed the claim of exemption as sales tax collection on ₹ 70,12,791/= and assessed to tax. On appeal, the first appellate authority had dismissed the appeal for the reasons stated thereon. Hence, aggrieved, the appellants preferred this presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticulture produce, other than tea, and rubber (natural rubber latex and all varieties and grades of raw rubber) grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover; * * * * * * * * * Explanation (1-A) Any amount charged by a dealer by way of tax separately without including the same in the price of the goods bought or sold shall not be included in the turnover. * * * * * * * * * 8. In this case, admittedly, the respondent/assessee had raised a common ground that the form of the sale bill adopted by them is uniform all over India and the rate of sale is inclusive of all taxes. The sale bill mentions the sale price as inclusive of all taxes. It was further pleaded by the assessee that the assessee had maintained details of the sale, i.e., value of goods and tax paid separately in their account books. They are therefore entitled to the benefit of exclusion of tax component from the total turnover even in terms of Rule 5-B (a) of the TNGST Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks are available to show correspondingly that tax has been separately collected and paid out to the Government, the question of excluding the tax component from the total turnover does not arise. 12. We also notice that in the explanation, the intentment of the statute is that any amount charged by the dealer by way of tax separately, without including the same in the price of the goods bought or sold, shall not be included in the turnover. This is to mean that tax collected will not be included in the turnover. There is no specification or indication in Explanation (1-A) that tax collected should be shown separately in the bill and only then it shall be excluded in the turnover. That appears to be the rationale behind the interpretation of the said provision in the earlier decisions of this Court in S.M.Garments case and Bata India case (supra), which have been referred to by the Tribunal while deciding in favour of the assessee. 13. Though a reference is made to the decision in M/s.Sundaram Industries Ltd. - Vs The State of Tamil Nadu (T.C. (R) No.1218 and 1242 of 2006 dated 19.9.11), by the learned Addl. Government Pleader, we find that the abovesaid decision as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Bill and added to the price of the goods, the character of payment would remain the same. Since freight and insurance charges represent expenditure incurred by the dealer in making the goods available to the purchaser at the place of sale, they would constitute an addition to the cost of the goods to the dealer and would clearly be a component of the price to the purchaser. The amount of freight and insurance charges would be payable by the purchaser not under any statutory or other liability but as part of the consideration for the sale of the goods and would therefore, form part of the sale price. From a reading of the above, it is clear that in that judgment the assessee/dealer has charged a consolidated amount for the execution of the works contract. The indivisible contract showed no bifurcation as regards labour and materials. Further the Court held that in the accounts, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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