S. Rangaswami Nadar and Co., Seeniappa Oil Mills vs State of Madras

Srinivasan, J.—The assessee in this case are: dealers in groundnut oil and oil cake. The only turnover in dispute is a sum of Rs. 1,39,458.

That the sales involved in this turnover were inter-State sales is not in dispute. The assessing authority however held that the C forms furnished by

the assessee u/s 8(4) of the Central Sales Tax Act were defective and accordingly brought this turnover to tax At 7 per cent instead of the

concessional rate of tax of one per cent. An appeal to the Appellate Assistant Commissioner failed, as also a further appeal to the Tribunal.

In order to understand the point in dispute, it is necessary to set out the details of the transactions leading to the sales. There were two

transactions both of which were concerned with the supply of ground nut oil in Hindustan Lever Brothers at Calcutta. The first contract called for

the supply of 200 candies of oil at Rs. 343 per candy. The assesses have three mil''s each at Thiruvannamalai, Villirpuram and Vridhachalam. From

each ,of these places they dispatched part of the quantity contracted to be supplied, and the bill which they submitted to the purchaser was for a

sum of Rs. 70485-41 nP. In respect of the second contract, which was also for a like quantity, dispatches were made from the mills at Villupuram

and Tirut/annamalai and the bill amount was Rs. 70128.

The C form declarations furnished by the purchasing dealer, the Hindustan Lever Bros, of Calcutta, were however for slightly different amounts. In

respect of the first transaction, as against the bill amount of Rs. 70485-41 nP the C form was for Rs. 69672 and as against the second bill of Rs.

70128, the! C form, was for Rs. 69391-68 nP. It was explained by the assessee that the difference was due to the fact that the purchasing dealer

granted the C form declaration in respect of the value of the oil alone, excluding the cost of packing, shipping expenses and f. o. b. charges. The

Tribunal was not satisfied with this explanation. It purported to rely upon two decisions of this court in The Deputy Commissioner of Commercial

Taxes, Madras Vs. Manohat Brothers, Madras, and T.C. No. 133 of 1961 (Mad) in holding that the concessional rate of tax was not available to

the assesses.

It is difficult to accept the conclusion reached by the Tribunal in this regard. The two tax revision cases decided by this court to which reference

has been made by the Tribunal in its order have really no relevance. What was pointed out in those decisions was that the declaration should be

furnished to the assessing authority in the manner prescribed by the rules and the production of these declarations long after the assessment before

the appellate authority would not conform to the requirements of the rules. It was also pointed out that the declaration should contain certain

specified particulars, the absence of which in the C form would disentitle the dealer to the concessional rates of tax u/s 8(1) of the Act. In the

present case there is no doubt whatsoever that the C forms pertain to these transactions. The C forms also cover the sale value of the Oil that was

the subject of the sale.

Revs ring to the definition of ""sale price"" in the Central Sales lax Act, it clearly excludes the cost of freight or delivery where such cost is separately

charged. The bills were produced before us in this connection and they clearly show that the f. o. b. and shipping charges were separately

indicated in the bills in addition to the cist of the goods; such charges so separately indicated would not form part of that sale price as defined in the

Act. The C from declarations furnished by the purchasing dealer are therefore correct in the sense that they declare the value of the goods

purchased by that dealer. The learned Additional Government Pleader concedes that since the bills set out these shipping charges separately, they

would not form part of the sale consideration and their non-inclusion in the C form declaration is not therefore) a vitiating circumstance.

It follows therefore that the declarations are valid and no defect exists which justifies the rejection of the claim to the concessional rate of tax u/s

8(1) of the Act. The petition is allowed. The assessee will be entitled to their costs. Counsel''s fee Rs. 100.