S MARIAPPA NADAR PARTNERS OF THE EVEREST MATCH CO Vs. STATE OF MADRAS

JUDGEMENT

(1.) CERTAIN common questions arise in these petitions. The assessments in question are under the Central Sales-tax Act for the year 1957-58. In order to understand the points in controversy, the facts relating to one petition will be set out. Though there are minor differences in the details relating to the other petitions, the questions for determination are not different.

(2.) T. C. No. 108 of 1959 : The assessee manufactures matches and sells the product of his factory both inside the Madras State and to dealers outside the state. He is a registered dealer under the Central Sales-Tax Act. According to the petitioner, when he sells the matches, he invoices only the sale value of the matches, that is to say, he does not include in this invoice the excise duty which is payable on the goods. He prepares a separate debt note on the buyer for this excise duty and collects that amount from the buyer. In respect of the turnover, the petitioner returned a net turnover of only Rs. 4, 43,000, and odd, representing the sale price of the matches, exclusive of the excise duty paid by him, and deducting also the freight charges incurred. A sum of Rs. 10,85,000 had been paid by way of excise duty and collected by the petitioner from the buyers outside the state on foot of separate debit notes referred to. The petitioner contended before the assessing authority that this amount of excise duty did not form part of the sale price. But this contention was overruled and the Deputy Commercial Tax officer assessed the net turnover liable to assessment under the Central Sales-tax act at Rs. 15,17,631, and the tax payable thereon at Rs. 15176. An appeal was taken to the Commercial Tax Officer before whom also it was claimed that the excise duty was paid on behalf of the buyer, and though it was recovered by a separate debit note it was entered in a separate ledger and did not form part of the sale consideration. It was alleged that it was agreed between the buyer and the seller that only the value of the matches was to be paid. It was further contended that since the Central Sales-Tax Act has to be administered in the same manner as the Madras General Sales-tax Act, the excise duty paid to the central Government being eligible for deduction from the turnover of the dealer under the Madras General Sales-Tax Act a similar relief should be granted in the assessment under the Central Sales tax as well. These contentions were examined by the Commercial Tax Officer who came to the conclusion that the method employed by the petitioner in issuing invoices and debit notes did not alter the true nature of the transaction which was that the consideration for the sale of the goods included the amount of excise duty paid on the goods. The further contention that excise duty should be exempted from the turnover was also rejected on the ground that the rules framed under the Central Sales-tax Act did not provide for any such exclusion.

(3.) IT would suffice to mention that the further appeals to the Tribunal also failed.