Madras High Court
Jenson & Nicholson (India) Ltd. vs State Of Tamil Nadu on 18 September, 1991
Author: A.S. Anand
Bench: A.S. Anand
JUDGMENT Dr. A.S. Anand, C.J.
1. The controversy in this appeal filed by the assessee against the order of the Joint Commissioner, Commercial Taxes, relates to the taxable turnover of Rs. 77,250 as determined by the assessing authority. The said turnover relates to the charges received by the assessee for printing, packing, freight, etc., of the calendars supplied to the distributors free of cost. The assessees questioned the assessment in appeal before the Appellate Assistant Commissioner, who held that since the turnover of Rs. 77,250 pertained to packing, freight and printing of the distributors' name in English at the bottom of the last sheet of the calendar, there was no contract occasioning the movement of goods from one State to another and consequently he cancelled the levy of tax at 10 per cent on Rs. 77,250. The joint Commissioner, however, proposed to suo motu revise the order of the Appellate Assistant Commissioner and after issuing notice to the assessees and inviting objections and hearing the parties, the Joint Commissioner confirmed the proposal and set aside the order of the Appellate Assistant Commissioner and restored that of the assessing authority.
2. We have perused the record and find the amount of Rs. 77,250 which was received by the assessee is made up of charges for packing, freight and printing of the name of the distributors. prices for calendars are not involved in this amount. The Assistant Commissioner, returned a specific finding to the effect that the disputed turnover of Rs. 77,250 pertained to packing, freight and printing of the purchaser's name and that there was no transfer of any property involved for money consideration. The assessing authority, we find, did not advert at all to the plea of the assessees that the amount represented only charges for packing, freight and printing. Without adverting to that plea of the assessees, the assessing authority, on surmises, held that the amount of Rs. 77,250 was liable to be taxed at 10 per cent in the absence of C forms. The appellate authority, therefore, rightly set aside the order of the assessing authority.
3. So far as the order of the Joint Commissioner is concerned, we find that it is also not sustainable. The Joint Commissioner noticed that the dealers (assessees) had supplied calendars to the customers free of cost. He then went on to observe that the assessees had themselves admitted that the amount charged was for the supply of calendars and represented only packing, freight and printing charges. As a matter of fact, the Joint Commissioner while observing that the calendars had been supplied for consideration, went on to define "consideration" as "charges for printing, packing, freight, etc." We fail to see how collection of charges for printing, packing, freight, etc., which are nothing but expenses for sale promotion could be considered as exigible to sales tax and how those expenses could fall within the definition of the expression "sale", within the meaning of section 2(h) of the Central Sales Tax Act, 1956. The Joint Commissioner was, therefore, not justified in upsetting the order of the Appellate Assistant Commissioner and consequently, the order of the Joint Commissioner cannot be sustained. We accordingly accept this appeal and set aside the order of the Joint Commissioner and restore that the of the Appellate Assistant Commissioner. No costs.
4. Appeal allowed.