K C P LTD Vs. GOVERNMENT OF ANDHRA PRADESH
HIGH COURT OF ANDHRA PRADESH
K C P LTD RAMAKRISHNA CEMENTS
GOVERNMENT OF ANDHRA PRADESH
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(1.) THESE five writ petitions can be disposed of by a common order as the petitioners have assailed the legality of the order of the Commercial Tax Officer, whereby he included (1) the cost of packing material and (2) railway freight in the taxable turnover and refused to grant exemption in respect of these two items.
(2.) FOR the purpose of disposal of these petitions, it would be sufficient if we refer to the facts stated in Writ Petition No. 3530 of 1970. The petitioner has a cement factory at Macherla engaged in the manufacture of cement. The selling price of the cement is fixed by the Central Government from time to time under the Cement Control Order at an uniform rate which is inclusive of excise duty and inter-State sales tax. The retail prices are fixed by the State Government by adding incidental charges such as cost of transportation from railway shed to stockists, godown charges, margin of profit for stockists, State sales tax, local taxes etc. The price fixed is split up so as to show the ex factory price, the selling agent commission, rebate on supplies against rate contract, excise duty, sales tax, freight and contingencies. All these items put together form the ultimate purchase price of the buyer. It is the case of the petitioners that the Commercial Tax Officer included the freight charges in the sale price, when the petitioners have not collected the freight charges from the consignees, i. e. , buyers, and only collected the sale price as fixed by the Government exclusive of the freight charges and therefore the assessing authority was in error in rejecting their claim for exemption in respect of the amount involved in the freight charges. It is also their case that similarly the assessing authority failed to grant exemption in respect of the other item relating to the packing charges.
(3.) MR. K. Srinivasa Murthy, appearing for the petitioners relied upon a decision of their Lordships of the Supreme Court in Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh  24 S. T. C. 487 (S. C.), to show that the inclusion of freight charges in the sale price for the purpose of computing the turnover runs contrary to the judgment of their Lordships. It may be pointed out at the outset that, the respondents have not filed any counter disputing the facts stated in the affidavits filed by the petitioners in support of their petitions. The learned Government Pleader for sales tax cases, however, sought to argue that the petitioners have collected the freight charges and when they collected the freight charges also, it cannot be said that the assessing authority was not justified in including the freight charges in the taxable turnover relating to the sale of cement. We are unable to find any material in support of the contention of the Government Pleader that the price for cement paid by the consignee to the petitioners includes the railway freight or freight charges.;
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