Ranganath Misra, J. - (1.) Special leave has been granted limited to the question as to whether insurance charges are a part of "turnover" under section 2(1)(s) of the Andhra Pradesh General Sales Tax Act, 1957 for purposes of levy of sales-tax. The tax authorities relying upon the definition of "turnover" held that insurance charges were includible for computing tax. The Appellate Tribunal came to the same conclusion and said:"It is only when the buyer desires that the risk during transit should be covered and the seller recovers insurance charges from the buyers such charges do not form part of the purchase price. Although insurance charges incurred to cover risk in transit cannot be considered as something done in respect of goods as observed by their Lordships of the Madras High Court in the decision reported in (1969) 23 STC 154, in the instant case it is not the case of the appellants that the buyers had desired that the transit risk should be covered on their behalf. On the contrary, we noticed that the price charged by the appellants is F.O.R. destination price. The domain over the goods while the goods are in transit in such a case clearly vested (in) and with the appellants, as under the terms of the contract the delivery is to be effected at the other end. In the circumstances transit insurance will form cost of the price of the goods sold. In our opinion such amounts have rightly been assessed to tax."
(2.) The High Court in revision dealing with the aspect stated: "The insurance charges, it is seen, are to be paid by the buyer, but are collected by Company before the goods are to be put on rail. The issue is whether insurance is done at the behest of the buyer Before the Commercial Tax Officer, the Company represented, the insurance premium was paid at the instance of the purchaser. The contention was rejected. In the appellate order it is recorded that the Company collected at a uniform rate and observed: 'it is not the case of the appellants that the buyers had desired that the transit should be covered on their behalf, on the contrary ........' "The Company it was held did not charge insurance at the behest of the buyer. Before the Tribunal in the Second Appeal, as a fact it is found, the insurance premium was not paid at the behest of the purchaser ........" The Counsel for the Company asserted that the facts recorded in the First Appeal and the appellate tribunal are not correct ........" "To sum up, the amount collected by the Company towards insurance charges was a sum charged by the Company as part of the price. Therefore, there was no error treating such amounts as part of the turnover."
(3.) The relevant portion of the definition of 'turnover' in section 2(l)(s) is: "(i) the total amount set out in the bill of sale; (ii) ........................ (iii) if there is no bill of sale, the total amount charged as the consideration for the sale or purchase of goods by a dealer either directly or through another, on his own account or on account of others, whether such consideration be cash, deferred payment or any other thing of value and shall include - (a) ********** (i) to (iii) ********** (b) ********** (c) any other sum charged by the dealer, whatever be the description, name or object thereof; and (d) **********" ;