DIGBOI PETROLIUM LIMITED Vs. COMMISSIONER TRADE TAX

JUDGEMENT

(1.) Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 9th February, 2004 relating to the assessment year, 1999-2000 under the Central Sales Tax Act.

(2.) Brief facts of the case are that the applicant is a Public Limited Company, incorporated under the Indian Companies Act, 1956 having its head office at B-7, Sector-20, Noida, Ghaziabad. Company was engaged in the business of bottling and distribution of domestic cooking gas (L.P.G). It is alleged that the distribution of the domestic cooking gas in cylinder was made to its customers situated at Delhi in accordance with the provisions of Gas Cylinder Rules, 1981 framed in exercise of powers conferred by Section 5 and 7 of the Explosive Act, 1884. While supplying the LPG in cylinder, applicant has taken cash security in a sum of Rs. 550/- for cylinder and Rs. 150/- for regulator, total Rs. 700/- as per terms and conditions specified on the reverse of the security voucher issued to the customers. During the year under consideration, applicant received a sum of Rs. 9,35,850/- by way of cash security. The said amount was transferred to profit and loss account, as the business was closed and the gas cylinder had not been returned by the customers. This transfer of the cash amount was considered by the assessing authority as sale of the cylinder and the aforesaid amount was brought to tax. Appeal filed by the dealer was rejected. Applicant filed second appeal before the Tribunal which was also rejected by the impugned order.

(3.) Question for consideration whether the security which was charged from the customers towards cylinder which was on returnable basis but on failure to return were forfeited, amounts to sale and the amount of security which was forfeited amounts to sale consideration liable to tax.