Allahabad High Court
U.P. State Cement Corporation vs Commissioner Of Sales Tax on 1 November, 1999
Equivalent citations: [2000]120STC46(ALL)
Author: P.K. Jain
Bench: P.K. Jain
JUDGMENT P.K. Jain, J.
1. In all these four revisions the common controversy involved is whether the freight charges said to have been charged separately could be treated as part of the turnover. The revisions are, therefore, decided by a common judgment.
2. The revisionist is a manufacturer of cement and in the assessment year under consideration various quantities of cements were sold. The goods were sold f.o.r. destination. The assessee's claim was, however, that railway freight which included the price of the goods was charged separately. The revisionist was not liable to tax on the turnover of freight charges. In all the assessment years it is submitted that the cement was supplied by the revisionist to various parties and price was f.o.r. destination but the contract of sale was not f.o.r. destination. Hence the amount of freight charged separately was liable to be excluded from the taxable turnover. On behalf of the assessee reliance was placed on a decision reported in [1979] 43 STC 476 (All); 1978 UPTC 653 (U.P. State Cement Corporation Ltd., Churk, Mirzapur v. Commissioner of Sales Tax, (U.P.). The Tribunal, however, did not accept the contention of the dealer and relying upon a decision reported in [1979] 43 STC 13 (SC) ; 1979 UPTC 37 (Hindustan Sugar Mills Ltd. v. State of Rajasthan) held that in view of the Cement Control Orders freight charges were the part of the sale price and therefore, could not be excluded from the taxable turnover. Another controversy relates to liability of the revisionist for payment of interest. The dealer has, therefore, filed the present revisions.
3. Shri Bharat Ji Agrawal, learned Senior Counsel appearing for the revisionist and Shri S.P. Kesharwani, learned Standing Counsel appearing for the revenue have been heard at length.
4. Shri Bharat Ji Agrawal has vehemently argued that even though the price was f.o.r. destination but there was a contract of sale between the revisionist and the various purchasers in which there was term No. 18 which specifically provide that although the price was f.o.r. destination railway station basis the responsibility of the suppliers for loss, shortages, or damage en route or at destination ceases once the goods are handed over to the carriers. His submission is that in the bill and invoice the freight was charged separately. He has submitted that the Control Order fixed maximum price which could not exceed. But the dealer had right to sell at lower price. He further submits that what the dealer actually received was minus freight charges. His next submission is that in view of the definition of turnover as it existed at the relevant time the amount of freight charged separately could be excluded from turnover. He has placed reliance upon a decision of this Court in U.P. State Cement Corporation Ltd., Churk, Mirzapur [1979] 43 STC 476 ; 1978 UPTC 653. Learned Standing Counsel, however, submits that in the instant case there were Cement Control Orders which regulated the prices of cement throughout the country and these Control Orders provided that the prices shall be f.o.r. destination. The Control Orders provided that freight charges shall be included in sale price. He has submitted that such a question was considered by the Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 ; 1979 UPTC 37 and it was held that the Control Orders have statutory force and were therefore, binding. These Control Orders provided that the amount of freight shall also be included in the turnover.
5. As regards the liability for payment of interest the submission of Sri Agarwal is twofold. Firstly, the dealer bona fidely believed that he was not liable to pay tax on freight charges which were paid by the purchasing dealers and such contention of the assessee was accepted by the High Court in a decision reported in [1979] 43 STC 476 (All) ; 1978 UPTC 653 (U.P. State Cement Corporation Ltd. v. Commissioner of Sales Tax, U.P.). The decision in Hindustan Sugar Mills Corporation Ltd. [1979] 43 STC 13 (SC) ; 1979 UPTC 37 came later on. The assessee could not foresee that the provisions of Control Order shall be interpreted to change the position regarding taxability of freight charges charged separately. To buttress his submissions he has relied upon a division Bench decision of this Court reported in [1982] 50 STC 56 ; 1980 UPTC 1320 (Annapurna Biscuit Manufacturing Co. v. State of Uttar Pradesh). His other submission with regard to the liability for payment of interest is that so far as the S.T.R. No. 1371 of 1990 is concerned, that relates to the Central Sales Tax Act, 1956. He has submitted that there is no provision under the Central Sales Tax Act for charging interest. The provisions of the U.P. Sales Tax Act, 1948, are not applicable and hence there is no liability for payment of interest with regard to Central sales tax. He has relied upon a decision of the honourable Supreme Court reported in [1997] 106 STC 460 ; 1998 UPTC 1 (India Carbon Ltd. v. State of Assam). Shri S.P. Kesharwani has, however, submitted that so far as the liability of interest with regard to delayed payment of U.P. sales tax is concerned, the Control Order specifically provided that freight shall be included in the sale price and shall be part of the turnover. The Control Order has been enforced much prior to the assessment years in question. Therefore, the assessee was liable to pay interest on delayed payment of tax. So far as the S.T.R. No. 1371 of 1990 is concerned, Sri Kesharwani fairly concedes that in view of the decision cited by Sri Bharat Ji Agrawal the revisionist was not liable to pay interest on delayed payment of Central sales tax.
6. The record shows that the practice of the revisionist was that it used to prepare invoices of supply of cement at the rate inclusive of f.o.r. destination, freight charges and thereafter amount of freight charges was deducted from the total amount. There is, however, no dispute that in the assessment year under consideration Cement Control Order, 1967 was in force. Clause 7 of the Control Order provided that the ex-factory prices admissible to the producer for the different varieties of cement shall be as specified in the Schedule, and the Schedule, as it stood at the material time, specified the maximum price of cement. The maximum price at which a producer could sell cement was prescribed in clause 8 which said that no producer shall sell "any other variety of cement at a price exceeding Rs. 214.65 per metric tonne free on rail destination railway station plus the excise duty paid thereon". The proviso to clause 8 provided that in the case of packed cement, there shall be added to this price such charges as may be fixed by the Central Government in respect of packing in jute bags or in any other containers. The explanation to this clause clarified that for the purpose of the Control Order, the expression "free on rail destination railway station" means "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". Clauses 9 and 11 provided for the creation of a Cement Regulation Account in the following terms :
"9. Payments to Cement Regulation Account.--Every producer shall, in respect of such transaction by way of sale of cement effected by him, pay within one month of the close of the month in which sales take place, to the Controller, an amount equivalent to the amount, if any, by which the free on rail destination price of such cement realised by him exceeds the aggregate of the following amounts, namely :
(i) the ex-factory price of such cement calculated in accordance with the rates specified in the Schedule ;
(ii) a selling agency commission calculated at the rate of Rs. 3 per tonne ;
(iii) the excise duty paid thereon ; and
(iv) in the case of packed cement, the charges fixed by the Central Government in respect of the packing or the containers under the first proviso to clause 8 :
Provided that the expenditure incurred by the producer on freight by the cheapest mode of transport or where any other mode of transport has been specified by the Central Government under Clause 4, by such mode of transport in respect of such transactions shall be reimbursed to the producer by the Controller from out of the Cement Regulation Account referred to in clause (11).
............
(11) Cement Regulation Account.--(1) The Controller shall maintain an account to be known as the Cement Regulation Account to which shall be credited the amounts paid by the producer under Clause 9 and such other sums of money as the Central Government may, after due appropriation made by Parliament by law in this behalf, grant from time to time.
(2) The amount credited under sub-clause (1) shall be spent only for the following purposes, namely :
(i) paying or equalising the expenditure incurred by the producer on freight in accordance with the provisions of this Order ;
(ii) equalising concession, if any, granted in the matter of price for supplies to Government or for purposes of export under the third proviso to clause 8 ;
(iii) expenses incurred by the Controller in discharging the functions under this Order subject to such limits, if any, as may be laid down by the Central Government in this behalf.
Clause 14 which is the last clause laid down the procedure for making claims for payment from the Cement Regulation Account. It provided that 'every producer shall make an application regarding his claim for any reimbursement towards equalising freight or equalising concession in the matter of export price to the Controller who may, in settling the claim, require the producer to furnish all details, relating thereto, including the cost of freight incurred, excise duty, if any, paid, etc.'......."
7. The term "turnover" has been defined in the U.P. Sales Tax Act Under Section 2(i) which reads as follows :
"(i) 'turnover' means the aggregate amount for which goods are supplied or distributed by way of sale or are sold by a dealer, either directly or through another, on his own account or on account of others, whether for cash or deferred payment or other valuable consideration."
Explanation I. Omitted.
Explanation II.--Subject to such conditions and restrictions, if any, as may be prescribed in this behalf,--
(i) the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof, other than cost of freight or delivery, or cost of installation or the amount realised as sales or purchase tax, when such cost or amount is separately charged ;
(ii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover ; and
(iii) where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes of the same without profit to the customer, the sale in respect of such goods shall be included in the turnover of the latter dealer alone."
8. Sub-clause (i) of explanation II provides that cost of freight or delivery or cost of installation charged separately shall not be the part of the turnover. Perusal of explanation II further shows that the conditions contained in sub-clauses (i), (ii) and (iii) of the explanation are subject to such conditions and restrictions as may be prescribed in this behalf. The controversy, therefore, is whether in a case where there is Control Order in force providing that freight charges shall form the sales price, would override the provisions of explanation of Section 2(i) of the U.P. Sales Tax Act. Such a controversy had arisen in the case of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC) ; 1979 UPTC 37, and the honourable Supreme Court had held that the Cement Control Order has overriding effect.
9. As already pointed out above clauses (i), (ii) and (iii) of the explanation II of Section 2(i) of the U.P. Sales Tax Act are subject to conditions and restrictions as may be prescribed in this behalf and any conditions imposed by law or order or notification having the force of law shall have overriding effect. The Cement Control Order, 1967 was enforced in order to regulate the price and supply of cement. In Hindustan Sugar Mills case [1979] 43 STC 13 (SC) ; 1979 UPTC 37 (SC), during the assessment year under consideration the assessee entered into diverse contracts of sale of cement with purchasers at the price of Rs. 214.65 per metric tonne "free on rail destination railway station" plus packing charges and excise duty. These contracts were on the terms and conditions set out in the form of "general terms and conditions of supply" adopted by the assessee. Clauses 5, 8 and 11 of the "General terms and conditions of supply" were relevant in that case. These terms and conditions were as follows :
"5. Although the price of cement is on the basis of f.o.r. destination railway station, consignments will nevertheless be despatched 'freight to pay' and credit afforded in our bill for the amount of freight payable. The purchaser should accordingly arrange to pay railway freight/road transport charges at the destination at the time of taking delivery.
8. Once the consignment is handed over to the carrier and a receipt is obtained, the responsibility of the company ceases. The company does not accept any liability for any delay, shortage, damage or loss of goods in transit. Claim should be lodged with the carriers by the buyers directly.
11. In respect of any claim for overcharge of freight, the purchaser shall put up claim with the concerned railway authorities."
10. The assessee, in fulfilment of these contracts, despatched cement to the purchasers at various destinations by rail and the railway receipts were made out on the basis of "freight to pay". The invoices sent by the assessee showed the "free on rail destination railway station" price of the cement despatched at the rate of Rs. 214.65 per metric tonne and added the amounts representing excise duty and packing charges and deducted the amount of railway freight since it was to be paid by the purchasers. The assessee did not charge in the invoices sales tax on the amount of railway freight, since in its view it did not form part of the "sale price", but in order to provide against a possible claim which might be made by the sales tax authorities, the assessee claimed by way of deposit an amount "towards contingent liability to sales tax on railway freight to be paid by you" that is, the purchasers. Each invoice also contained a statement at the commencement that : "Every care is taken in packing and despatching goods and our responsibility for shortage, loss, delay or damage ceases after delivery at works siding. All such claims should be preferred with the railways or the carriers concerned." The question arose in the assessment of the assessee to sales tax under the Rajasthan Sales Tax Act, 1954, and the Central Sales Tax Act, 1956, as to whether the amount of freight deducted from the "free on rail destination railway station price" (hereinafter for the sake of brevity referred to as f.o.r. destination price) in the invoices made out by the assessee and paid by the purchasers formed part of the "sale price" within the meaning of the definition of that term in Section 2(p) of the Rajasthan Sales Tax Act, 1954 and Section 2(h) of the Central Sales Tax Act, 1956. The sales tax authorities took the view that the amount of freight formed part of the "sale price" and was, therefore, liable to be included in the turnover of the assessee for the purpose of assessment of sales tax. The Supreme Court on consideration of the provisions of the Rajasthan Sales Tax Act as well as the Central Sales Tax Act as also the provisions contained in the Cement Control Order, 1967 held that the freight charges shall be part of the turnover.
11. In the case of Hindustan Sugar Mills Ltd. [1979] 43 STC 13 ; 1979 UPTC 37, the honourable Supreme Court while considering the provisions of the Cement Control Order held that "the underlying object behind these provisions was that cement should be available at uniform price throughout the country and that is why it was provided that no producer shall sell cement at a price exceeding Rs. 214.65 per metric tonne 'free on rail destination railway station' plus packing charges and excise duty. This was the maximum price at which the Central Government intended that cement should be available anywhere in India, irrespective of the distance from the place of manufacture. Now this price was worked out on the basis of average freight and since the actual freight would necessarily be more or less than the average freight depending on the distance of the place of destination from the manufacturing site, clauses 9 and 11 of the Control Order provided a machinery by which the producer could be ensured the retention price specified in the schedule along with the selling agency commission at the rate of Rs. 3.00 per metric tonne, packing charges and excise duty. This result was achieved by providing that the producer should hand over to the Controller the excess of the 'free on rail destination railway station' price including packing charges and excise duty realised by him over the retention price, selling agency commission, packing charges and excise duty and he should then be reimbursed the amount of expenditure actually incurred by him on freight by the cheapest mode of transport".
12. In para 12 of the judgment (page 32 of 43 STC) the honourable Supreme Court held that "the Control Order here becomes very material. It is a statutory order having binding force and effect and it must govern the transactions of sale of cement entered into by the assessee with the purchasers. The Control Order is designed to ensure availability of cement at a uniform price throughout India irrespective of the distance from the place of manufacture and clause 8 provides a maximum price of Rs. 214.65 per metric tonne f.o.r. destination railway station at which a producer may sell cement manufactured by him. It was at this maximum price of Rs. 214.65 per metric tonne f.o.r. destination railway station that, in pursuance of this clause, the assessee sold cement to various purchasers. The price was clearly inclusive of freight. But the question is : who, under the terms of the contract, was liable to pay the freight, the assessee or the purchaser ? Was the contract one for delivery at destination railway station or was it a contract in which delivery to the purchaser would be complete as soon as the goods are put on rail at the place of despatch ? The answer to this question would clearly be in favour of the assessee if we have regard only to the terms and conditions of the contract without taking into account the provisions of the Control Order. Clause 8 of the 'General terms and conditions of supply' incorporated in the contract provided that once the goods are handed over to the railway and a railway receipt is obtained, the responsibility of the assessee shall cease and the risk shall pass to the purchaser and, therefore, if there is non-delivery or shortage or delay in delivery, it is the purchaser who, according to this clause, shall be entitled to make a claim against the railways....... But we have to consider the impact of the provisions of the Control Order, for these provisions, having statutory force and authority, have overriding effect and the terms and conditions of the contract to the extent to which they conflict with these provisions must be held to be excluded."
13. After discussing the various provisions of the Control Order and the provisions of the Rajasthan Sales Tax Act as also the Central Sales Tax Act as well as the terms of the 'general terms and conditions of supply the Supreme Court held that "the provision in the contract that the delivery to the purchaser shall be complete as soon as the goods are put on rail and payment of the freight shall be the responsibility of the purchaser is wholly inconsistent with the scheme of the Control Order and must be held to be excluded by it. The Control Order is paramount : it has overriding effect and if it stipulates that the freight shall be payable by the producer, such stipulation must prevail, notwithstanding any term or condition of the contract to the contrary. The conclusion is, therefore, inevitable that the amount of freight forms part of the 'sale price' within the meaning of the first part of the definition".
14. In para 15 of the judgment (page 35 of 43 STC) the honourable Supreme Court further held that "here on the view taken by us, the amount of freight forms part of the 'sale price' within the meaning of the first part of the definition and it is not necessary for the State to invoke the inclusive clause and in fact the State has not done so. The exclusion clause is, therefore, irrelevant and cannot be called in aid by the assessee. We may point out that even if the exclusion clause were read as an exception to the first part of the definition which, as we have pointed out, cannot be done, it cannot avail the assessee. It is only where the cost of freight is separately charged that it would fall within the exclusion clause and in the context of the definition as a whole, it is obvious that the expression '.......cost of freight.......is separately charged' is used in contradistinction to a case where the cost of freight is not separately charged but is included in the price.............. Where the cost of freight is part of the price, it would fall within the first part of the definition and to such a case, the exclusion clause in the second part has no application.
We must, therefore, hold that, by reason of the provisions of the Control Order which governed the transactions of sale of cement entered into by the assessee with the purchasers in both the appeals before us, the amount of freight formed part of the 'sale price' within the meaning of the first part of the definition of that term and was includible in the turnover of the assessee".
15. In the present case the terms and conditions of supply are almost identical. The terms and conditions which have been quoted in para 10 of the memo of revision reads as follows :
"18. Responsibility for loss, shortages, damages, etc., in transit.-- Although the price is f.o.r. destination railway station basis the responsibility of the suppliers for loss/shortages or damage en route or at destination ceases once the goods are handed over to the carriers after booking the consignments under clear railway receipts at railway risk. If there is any shortages or damages in supply, it must be recorded by the consignee with the carriers at the time of taking delivery and a claim for the same should be preferred by him immediately with the carriers concerned. It is obligatory on the consignee to insert suitable remarks in the delivery regarding shortage/damages, etc., and to prefer their claims in time and also to inform the supplier simultaneously."
16. Delivery has been done by the assessee in the same manner as was done in the case of Hindustan Sugar Mills Ltd. [1979] 43 STC 13 (SC) ; 1979 UPTC 37 but since the explanation makes it clear that the clauses contained in explanation were subject to conditions as may be imposed and further that the Control Order has its overriding effect, in the case of the assessee the freight even though charged separately cannot be excluded from the definition of the turnover and the freight charges shall be includible in the taxable turnover. The terms and conditions in Clause 18 of the terms shall be of no avail to the revisionist. In the case of U.P. State Cement Corporation Ltd. reported in [1979] 43 STC 476 (All.); 1978 UPTC 653, the effect of Cement Control Order was not considered by the court as the decision was rendered by the High Court prior to the decision of the Supreme Court in Hindustan Sugar Mills Ltd. [1979] 43 STC 13 ; 1979 UPTC 37 the said decision cannot be of any help, to the revisionist.
17. Now comes the question regarding liability of the revisionist for payment of interest on delayed payment of the tax amount. So far as the delayed payment of Central sales tax is concerned, the honourable Supreme Court has now settled that since there is no provision under the Central Sales Tax Act for charging interest on the delayed payment of tax, the provisions of the U.P. Sales Tax Act with regard to the liability for payment of interest on the delayed payment of tax shall not be applicable. The revisionist would, therefore, not be liable for payment of interest on the delayed payment of Central sales tax. In India Carbon Ltd. v. State of Assam [1997] 106 STC 460 ; 1998 UPTC 1 the honourable Supreme Court in para 14 of the judgment held as follows :
"Now, the words 'charging or payment of interest' in Section 9(2) occur in what may be called the latter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act ; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka & Co. (Agencies) Pvt. Ltd. v. State of Maharashtra [19751 35 STC 571 (SC) ; 1975 UPTC 378 (SC), it must be held that the substantive law that the States' sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon."
Therefore, so far as the Central Sales Tax Act is concerned, the revisionist is not liable to pay interest on the delayed payment of Central sales tax.
18. There is no dispute that under the U.P. Sales Tax Act the assessee was liable to pay interest at the rate of 2 per cent on the delayed payment of tax in view of the provisions contained in Section 8(1) read with explanation to the aforesaid section. Sub-section (1) of Section 8 of the U.P. Sales Tax Act provides that "the tax admittedly payable shall be deposited within the time prescribed or by thirty-first day of August, 1975, whichever is later, failing which simple interest at the rate of two per cent per mensem shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed till the date of payment of such amount". The explanation to Sub-section (1) of Section 8 provides that "the tax admittedly payable means the tax which is payable under this Act on the turnover of sales or, as the case may be, the turnover of purchases, or of both, as disclosed in the accounts maintained by the dealer or admitted by him in any return or proceeding under this Act, whichever is greater". There cannot be any dispute that after interpretation of the Cement Control Order in the year 1979 by the Supreme Court in Hindustan Sugar Mills Ltd. case [1979] 43 STC 13 ; 1979 UPTC 37 the assessee was liable to pay tax on freight charges even though charged separately. The assessee's claim is, however, that he bona fidely believed that he was not liable to pay tax on freight which was charged separately and such contention of the assessee was accepted by the High Court in the case reported in [1979] 43 STC 476 (All) ; 1978 UPTC 653 (U.P. State Cement Corporation Ltd., Churk, Mirzapur). Therefore, it cannot be disputed that the assessee was under a bona fide belief that the amount of freight which was charged separately under the contract was not part of the turnover and, therefore, was not liable to tax. The question is whether on account of such bona fide belief the assessee has not deposited tax on the amount of freight which according to the Control Order was part of the sale price of the turnover, the assessee can be made liable to pay interest on unpaid amount of tax. The argument of Sri Kesharwani is that since the Control Order had come in force much before the assessment years under consideration, the assessee should have known that freight charges even though charged separately, were liable to be taxed as turnover. Therefore, the dealer should have deposited the tax on freight charges also and failure of the dealer to deposit the tax on such part of the turnover would make him liable to pay interest. It may be pointed out here that even the department itself was not clear about the effect of the Cement Control Order before it was interpreted by the honourable Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 ; 1979 UPTC 37. In assessee's own case reported in [1979] 43 STC 476 (All) ; 1978 UPTC 653 (U.P. State Cement Corporation Ltd. v. Commissioner of Sales Tax), the contention of the assessee was accepted by the High Court. Therefore, it cannot be said that the assessee was not under a bona fide belief that he was not liable to tax on freight charges which were recovered separately. The liability of the dealer in view of the provisions contained in the Cement Control Order in respect of the freight charges was made clear by the honourable Supreme Court in the case reported in [1979] 43 STC 13 ; 1979 UPTC 37 (Hindustan Sugar Mills Ltd. v. State of Rajasthan). The question whether in a case where taxability changed on account of judicial interpretation, subsequently the dealer was liable to pay interest on unpaid part of the tax was considered by a division Bench of this Court in Annapurna Biscuit Manufacturing Co, v. State of Uttar Pradesh [1982] 50 STC 56 ; 1980 UPTC 1320. That was a case in which rate of tax was changed on account of judicial interpretation subsequently. The court held that "if the dealer calculates the tax payable by him on the relevant turnover in consonance with the decision of the concerned authority or the court which, at the time of making the calculation, held the field, it would not be possible to say that he calculated the tax payable by him wrongly. Indeed the law would expect him to calculate the tax in such a manner and would not penalise him for acting in the manner in which he was expected to act. The dealer while calculating the amount of tax payable by him at a particular time is not expected to anticipate either that the decisions which at that particular time held the field would be reversed or that subsequently the Legislature will step in and make an enactment rendering his calculation wrong by making a legislation effective from an earlier date and to make his calculation accordingly". It was observed in para 4 of the judgment that in such a case it is the bona fide of the assessee which shall have to be examined. So long as the calculation is honest and fair the dealer shall not incur any liability to pay interest. Shri Bharat Ji Agrawal has pointed out that the dealer has deposited the amount of tax on the freight part of the turnover also at a subsequent stage. In the opinion of the court, in the peculiar facts and circumstances of the present case, the dealer is not liable to make payment of interest on the unpaid part of the tax. To this extent the judgment and order of the Tribunal deserve to be modified.
19. The revisions are partly allowed. So far as the tax liability of the revisionist on the freight part of the turnover is concerned, the decision of the Tribunal is upheld. So far as the liability of interest on part of the tax deposited with delay is concerned, the orders of the Tribunal and the authorities below are set aside and it is held that in the peculiar facts and circumstances of the present case the dealer shall not be liable to pay interest on the such part of the tax.