SKY GOURMET CATERING PVT. LTD. Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT), BANGALORE AND OTHERS

JUDGEMENT

(1.) In these petitions, the petitioner is praying for quashing annexure P reassessment order dated October 8, 2010 for the period November, 2005 to June 2010 and to issue a mandamus declaring the levy of VAT by the first respondent on the gross amount received towards supply, handling, high lifting, transportation and loading are taxable under section 65(105)(zzt) of the Finance Act, 1994, as ultra vires.

(2.) The petitioner is a caterer/supplier of food items and has undertaken to supply food through M/s. Taj Sats Air Catering Ltd., within the Bangalore International Airport area. By the reassessment order, the respondent-authority has imposed tax on transportation also for the supply of ready-made food stating that it also forms part of VAT. Being aggrieved by the said order of re-assessment, the petitioner has directly approached this court on the ground that the reassessing authority ought to have split the issue with respect to the manufacture of food and sale as sales and, transfer of goods from the point of manufacturing till the end point, i.e., airport as service and exempt the imposing of sales tax. Accordingly, these writ petitions are filed. The learned counsel has relied upon several decisions in support of his argument and also argued accordingly.

(3.) The Government Pleader relying on the Division Bench of this court in S. T. A. No. 84 of 2009 decided on July 8, 2010 (Apco Concrete Block and Allied Products v. Deputy Commissioner of Commercial Taxes, 2011 44 VST 312 submitted, as per the definition under sections 2(34) to 2(36) and also section 2(29) of the VAT Act and also the clarification therein that is issued by the Government, i.e., if the freight/ transportation charges are paid by the seller prior to the delivery of goods and ownership and risk remains with the seller, then such transportation charges are part of the sale consideration and liable to tax. If the freight/ transportation charges collected are post-sale expenditure, then such charges do not form part of the sale consideration and not liable to tax. Accordingly, he contended, this transportation is only incidental to the sale of goods to deliver the goods to a particular destination as such, it will come within the purview of VAT Act.