Decided on November 21,1992



P.VENKATRAMA REDDY, J. - (1.)THESE three T. R. Cs. are filed against a common order of the Sales Tax Appellate Tribunal dated November 18, 1987, in T. A. Nos. 612/85, 521/83 and 466/83, respectively. T. A. No. 466/83 (on the file of S. T. A. T.) arose out of the assessment made against the petitioner-company for the year 1980-81. T. A. No. 521/83 relates to the year 1981-82. T. A. No. 612/83 also relates to the same year, i. e. , 1981-82. All the three appeals were dismissed by the Sales Tax Appellate Tribunal. Hence these tax revision cases.
(2.)THE petitioner is a manufacturer and dealer in cement. For the assessment years 1980-81 and 1981-82, the amounts of Rs. 43,01,169 and Rs. 89,64,519 were collected towards the freight charges from the stockists and dealers by way of assessment and reassessment orders (sic ). The legality of these assessments is challenged in T. R. C. Nos. 287 and 208 of 1988. For the reassessment year 1981-82, the Commercial Tax Officer made a reassessment revising the tax from 41 per cent to 8 1/2 per cent on the freight charges of Rs. 89,64,519. This was the subject-matter of appeal in T. A. No. 612/85 and T. R. C. No. 197 of 1988 arises out of that appeal.
At the outset it May be stated that there is no dispute in these T. R. Cs. with regard to the tax levied on the freight charges forming part of the sale bills in so far as the rail despatches are concerned and the entire dispute is only with respect to despatches by lorries. It should also be mentioned that no separate arguments were addressed on the question of rate of tax in T. R. C. No. 197 of 1988. Obviously, if the freight charges under dispute are includible in the turnover the revised rate applied is legally correct.

(3.)DURING the relevant years, the sale of cement was governed by the Cement Control Order, 1967, as amended from time to time. The Cement Control Order was promulgated by the Central Government in exercise of powers conferred on them by the Industries (Regulation and Development) Act, 1951. Clause 3 of the said Order lays down a prohibition against the removal of cement whether sold or unsold from the premises of the factory without the previous permission in writing of the Central Government. Clause 4 confers power on the Central Government for sale of cement to any person or to transport the cement on such modes of transport or on such terms and conditions which may he specified in the order issued by the Central Government. Under the proviso to clause 4, the Central Government can authorise the State Government to decide upon the details of the allottees and the quantities to be supplied to each of them by each of the cement producers within the total quantities of cement allocated to the State Government. Under clause 5, the Central Government may, with a view to securing proper distribution of cement, issue such orders, general or special, as may he necessary to any producer as to the disposal of his stock. Clause 6 provides for maintenance and filing of accounts and returns regarding the production and disposal of cement. Ex-factory prices admissible to the producer for the different varieties of cement are specified in the schedule to the Control Order. Clause 8 obliges the producer to sell the cement of different varieties at the prices specified therein - "free on rail destination railway station plus the excise duty paid". The price stipulated varied from Rs. 318. 94 per M. T. to Rs. 350. 94 per M. T. To the f. o. r. destination railway station price as mentioned above and the excise duty paid, the packing charges at the rates specified by the Central Government can also he added. The explanation to clause 8 defines the expression "free on rail destination railway station" as meaning "the price (including the cost of transport by the cheapest mode except where any other mode of transport has been specified by the Central Government under clause 4, at the destination point)". Clause 9 provides for payments to he made into Cement Regulation Account. Clause 9 enjoins that every producer shall pay to the Controller within one month of the close of the month in which the sale took place, an amount equivalent to the amount, if any, by which the f. o. r. destination price of such cement exceeds the aggregate of the following amounts, viz. : (i) ex-factory price as specified in the Schedule; (ii) selling expenses calculated at the rate of Rs. 3. 71 per metric tonne; (iii) excise duty paid thereon; and (iv) in the case of packed cement, the charges fixed by the Central Government under the first proviso to clause 8.

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