LIPTON INDIA LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE only question that arises in this tax case is as to whether the assessee is entitled to delete a sum of Rs. 3,94,543. 50 from the turnover as determined by the authorities on the ground that the said sum represented the sales tax collections made. THE assessee's claim was rejected by the assessing authority, and the said sum was also treated as part of the turnover and brought to charge under the Tamil Nadu General Sales Tax Act. THE assessee's appeal before the Appellate Assistant Commissioner having failed, there was a further appeal to the Tribunal. THE Tribunal took the view that factually the assessee has charged an inclusive price for the goods sold by him without separating the sales tax from the contract price and that even otherwise the legal position was clear that the sales tax collected formed part of the turnover as defined under the Act. This view of the Tribunal has been challenged before us. THE assessee is a dealer selling tea all over India. It is only a wholesaler, and it does not sell tea in retail. It has got various retail dealers to whom the consignments of tea are sold at the wholesale rates fixed already and shown in the price list supplied to those dealers. A printed price list applicable to the wholesale dealings of the assessee, effective from 3rd May, 1964, had been produced before the Tribunal by the assessee. All the dealings between the assessee and his purchaser during the year in question were only based on this price list. This price list shows the net actual price for the tea and also the aggregate of the actual price and the sales tax payable thereon. As the rates of sales tax payable in respect of each State is different, the price list indicates the various aggregate amounts payable for the supplies made to dealers in various States. So far as the supplies made to dealers in Madras State is concerned, the sales tax payable has been shown as 5 per cent. THE price list sets out separately the net price as well as the aggregate of the net price and the sales tax payable on that price in respect of various brands of tea. An extract from the price list in relation to two brands called "connoisseur" and "green label" is given below : LIPTON (INDIA) LIMITEd Nett wholesale & inclusive prices in India from 3rd May, 1964. Per Kilogram (Except envelope packs) ------------------------------------------------------------------------ PRICe (w. e. f. 3-5-1964) ------------------------------------------------------------------------ List Nett 1% 2% 4. 25% 2/64 S. T. S. T. S. T. from BRAND AND PACK 29-3-64 (a) (b) (c) Rs. Rs. Rs. Rs. ------------------------------------------------------------------------ Connoisseur 500 g. tin 17. 50 17. 50 17. 67 17. 75 18. 24 Green label 500 g. tin 11. 49 11. 49 11. 60 11. 72 11. 98 250 g. tin 11. 10 11. 10 11. 21 11. 32 11. 57 100 g. tin. . . 11. 10 11. 21 11. 32 11. 57 5 g. tin 10. 67 10. 67 10. 78 10. 88 11. 12 * ------------------------------------------------------------------------ ------------------------------------------------------------------------ 5% 5. 25% 5% 6% 7% 7. 25% S. T. S. T. S. T. S. T. S. T. S. T. 7-P Kg. Octroi (d) (e) (f) (g) (h) (i) Rs. Rs. Rs. Rs. Rs. Rs. ------------------------------------------------------------------------ 18. 37 18. 42 18. 44 18. 55 18. 72 18. 77 12. 06 12. 09 12. 13 12. 18 12. 29 12. 32 11. 65 11. 68 11. 72 11. 77 11. 88 11. 90 11. 65 11. 68 11. 72 11. 77 11. 88 11. 90 11. 20 11. 23 11. 27 11. 31 11. 42 11. 44 * * ------------------------------------------------------------------------ (a) Madhya Pradesh (Regd.) (Hot tea shops); (b) Punjab Govt. Depts. ; (c) Andhra; (d) Madras, Assam, West Bengal; (e) Kerala; (f) Mysore; (g) Maharashtra & Punjab (General); (h) Madhya Pradesh (General), Gujarat (Regd. Dealers); (i) Gujarat (Un-regd. Dealer ). THE above nett prices are exclusive of sales tax, terminal tax, octroi & other local taxes. THE inclusive prices indicate which taxes have been incorporated. State selling at exclusive prices - Bihar, Orissa, Rajasthan, U. P. , Delhi. (Re-typed 4-1-65 ).

(2.) IN that price list, in respect of the last two items which consist of tea sold in packets, no sales tax is charged, and the actual net price for tea alone is shown as the aggregate amount payable by the purchaser. Though the price list sets out the net price as well as the aggregate of the net price and the sales tax payable thereon in respect of the various brands of tea, except the last two items, in the actual bills made out by the assessee, only the aggregate amount referred to in the price list is found. For example, in respect of the first brand of tea, "connoisseur", the price charged in the bill so far as the supplies effected to Madras for 100 tins of 500 g. will be Rs. 1,837 (which is arrived at by multiplying Rs. 18. 37 by 100 times ). Admittedly, there is no specific reference to the net price and the sales tax in the bills issued, though the assessee and its purchaser knew fully well as to what is the actual price and the tax collected in respect of the sale covered by each of the bills.

(3.) WE, therefore, hold that the assessee is entitled to the benefit of the direction given in S. O. 13. The tax case is, therefore, allowed and the order of the Tribunal is set aside, and the turnover in dispute will stand excluded from the taxable turnover. There will be no order as to costs. Petition allowed. .