- (1.) THIS judgment will dispose of G. S. T. Ref. Nos. 10 to 13 of 1980.
(2.) ON applications filed by the Excise and Taxation Commissioner, Haryana, under Section 42 (1) of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the Act"), the Sales Tax Tribunal, Haryana, has referred the following two questions of law for our opinion : (i) Whether, on the facts and circumstances of this case, the amount of freight charged on the goods and later on reduced from the bill would be liable to deduction from the turnover of the dealer in terms of Section 2 (j) of the Central Sales Tax Act, 1956 and 2 (i) of the Punjab General Sales Tax Act as applicable to the State of Haryana ? (ii) Whether, on the facts and circumstances of the case and in view of the judgments of the High Courts of the Madhya Pradesh, Tamil Nadu and Supreme Court, the ratio of the Hyderabad judgment is applicable to the sales transactions in these cases ? The factual matrix giving rise to these questions may be viewed : Janki Dass and Co. , Sonepat, i. e. , the respondent, is a registered dealer under the Punjab General Sales Tax Act, 1948, as applicable to the State of Haryana at the material time and the Central Sales Tax Act, 1956. The respondent is the sole distributor of Atlas Cycle Industries Ltd. , Sonepat, all over the country. The Assessing Authority while framing assessment for the year 1964-65, under the State Sales Tax Act, vide his order dated July 12, 1973, held that the amount of freight charged on the goods and later on reduced from the bill was a part of the turnover of the dealer and the same was liable to sales tax under both the Acts. Similarly, while framing assessment for the assessment year 1965-66, the Assessing Authority levied tax on the freight amount included in the price of goods in the first instance and later on reduced from the bill under the State Sales Tax Act and the Central Sales Tax Act, vide order dated August 19, 1973.
(3.) AGGRIEVED by these orders, the respondent went up in appeal before the Deputy Excise and Taxation Commissioner, Ambala, who did not agree with the contentions raised by the respondent and dismissed the appeals and confirmed the order of the Assessing Authority. Still dissatisfied, the respondent filed four appeals against the orders of the Deputy Excise and Taxation Commissioner before the Tribunal. It was argued on behalf of the respondent that the terms and conditions printed in the price list and the form of order placed by the purchaser were similar to the terms and conditions present in the case reported as Hyderabad Asbestos Cement Products Ltd. v. State of A. P. [1969] 24 STC 487 and in that case, their Lordships of the Supreme Court had held that under such circumstances, freight does not form part of the turnover of a dealer. The departmental representative, on the other hand, had argued before the Tribunal that the judgment in the Hyderabad Asbestos case [1969] 24 STC 487 (SC), was distinguishable because of Clauses (4) and (16) of the terms and conditions of the present case. The Tribunal, after painstakingly analysing the statutory provisions and, more particularly, the definition of "sale price" given in Section 2 (h) of the Central Sales Tax Act and the definition of "turnover" enacted in Section 2 (i) of the Punjab General Sales Tax Act and various authorities cited before him, came to the conclusion that in view of the definitions referred to above, the sales tax on freight was leviable only in cases where the freight was actually charged by the selling dealer from the purchasing dealer or the same was, under some contract, payable to the selling dealer. Interpreting the terms of the contract, he highlighted a condition that the railway receipt will be "freight to pay", and the railway freight will be deducted from the invoices and will be payable to the dealer at its destination. The Tribunal recorded a finding of fact that the freight was neither payable to nor was it charged by the appellant-company. The freight could not, therefore, be included in the turnover. The Tribunal held that the appeals were fully covered by the ratio of the Supreme Court's judgment in Hyderabad Asbestos Cement Products Ltd. case [1969] 24 STC 487. Consequently, he held that sales tax was not leviable on freight under either of the Acts. It is in this background that the questions of law extracted in the opening part of the judgment have been referred to us under Section 42 (1) of the Act for our opinion.;