STATE OF KARNATAKA Vs. MODAYIL PROPERTIES (P) LTD.

JUDGEMENT

(1.) The Revenue has preferred these petitions challenging the order passed by the Karnataka Appellate Tribunal which has set aside the order passed by the assessing authority as well as the Appellate Commissioner and held that the assessee is not liable to pay any sales tax on the transportation charges mentioned in the invoice. It is not in dispute that in the invoice raised, the assessee has shown the amount payable towards transportation charges separately and the value of the goods sold is also shown separately. The payment terms are 60 days credit from the date of receipt of materials. Therefore, the goods are to be delivered by the assessee to the consignee at their address. Apart from these no documents are produced by the assessee to show at what point of time, the title of the goods passes to the consignee. Therefore, it is clear that the title of the goods passes to the consignee at the time of delivery. All amounts received prior to the delivery constitute the value of the goods, which may include the transportation charges also. Under these circumstances, the assessing authority as well as the Appellate Commissioner held that the sales tax is payable on the total amount of the goods plus freight charges. That order has been set aside by the Appellate Tribunal on the ground that the transportation charges are fixed separately for each items and the same are collected in the tax invoices and paid to the transporters. Therefore, the transportation charges so collected are part of the post-sale expenditure and are not liable to be included in the total turnover.

(2.) In the first place, the amount is not collected. The amount is payable within 60 days from the date of invoice. There is nothing in the document to show that the transportation charges are directly paid to the transporters. Moreover, the transportation charges is fixed to a particular unit. Under these circumstances, it cannot be said that the transportation charges collected form part of the post-sale expenditure and cannot be included in the total turnover. In fact, this court had an occasion to go into the said question in the case of S.T.A. No. 84 of 2009 which was disposed of on July 8, 2010 (APCO Concrete Block and Allied Products v. Deputy Commissioner of Commercial Taxes, Audit 1, DVO, 2011 44 VST 312 (Karn)) where at para 8 it was held as under (pages 315 and 316 in 44 VST):

(3.) In that view of the order, the order passed by the Tribunal is contrary to law and cannot be sustained. Hence, we pass the following: