S VADIVEL MUDALIAR Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE two tax cases arise under the Tamil Nadu General sales Tax Act, 1959. Although the assessees in the two cases are different, the problem raised in these appeals from the Board's common order is similar. Indeed, the Board had dealt with both these cases as raising the same issues. The point arises out of a claim for deduction by the assessees for freight charges which were included in their turnover. Both the assessees carry on business in minerals. They sell the minerals to their customers fixing the price ex mine, but undertake to transport the minerals to the particular destination which is pointed out by the customers concerned. The assessees claimed that they were entitled to deduct the cost of freight from the total turnover, in accordance with the provisions of rule 6 (c) (i) of the tamil Nadu General Sales Tax Rules, 1959. This rule provides that freight, when specified and charged for by the dealer separately, without including the freight in the price of the goods sold, will have to be deducted from the total turnover of a dealer for the purposes of arriving at the taxable turnover. This claim, however, was not granted by the assessing authority. But the Appellate assistant commissioner, on appeal, accepted the assessee's claim on the basis of consideration of the terms of the bargain between the assessees and their customers. The Appellate Assistant Commissioner pointed out that the prices charged for by the assessees were at ex mine rates. He also observed that while the buyers were apparently prepared to meet the cost of transport, the assessees themselves, in point of fact, had met the cost of freight and recovered it from the buyers. It was also observed that the cost of freight was separately charged for by the assessees. Having regard to all these circumstances, the Appellate Assistant Commissioner held that rule 6 (c) (i)applied and the assessees were entitled to the deduction which they claimed. THESE orders of the Appellate Assistant Commissioner, however, were taken up by the Board of Revenue for suo motu revision. After hearing the assessees the Board reversed the decision of the Appellate Assistant Commissioner and restored the orders of assessment in which the freight charges were disallowed.

(2.) IN these appeals by the assessees, the correctness of the common order passed by the Board is challenged. We have perused the order of the Board. We are not in a position to understand what the Board was deriving at and what precisely was the basis of its decision to set aside the order of the Appellate Assistant Commissioner. Without trying to unravel any thread of reasoning from the order, we think, we can decide these appeals by having regard to the findings of facts which the Board itself had recorded in its order. IN paragraph 6 the Board observed that there was nothing in the record to show that delivery of the minerals by the assessees was ex mine. The Board also stated that the contacts entered into between the assessees and their buyers showed that though the price was ex mine, the sales were concluded only at the buyers'sites.