COMMISSIONER, TRADE TAX Vs. HARBANS LAL MEHROTRA

JUDGEMENT

(1.) THE present revision is directed against the order dated December 18, 1997 passed by the Trade Tax Tribunal, Ghaziabad in Second Appeal No. 403 of 1993 relevant to the assessment year 1986 -87 whereby and whereunder the Tribunal has allowed the appeal preferred before it by the dealer -opposite party and held that the amount of security and insurance charges as realised from the customers by the dealer -opposite party is not a part of taxable turnover.

(2.) THE dealer -opposite party is carrying on the business of purchase and sale of safety razors and blades. It has admitted its taxable turnover of Rs. 32,70,538.77 and realised a sum of Rs. 14,62,018.14 as insurance charges and security along with each bill issued for sale. The assessing officer, after affording an opportunity of hearing to the dealer -opposite party, took the view that the said insurance charges and the security amount charged along with each sale bill by the dealer -opposite party from the customers are part of turnover, vide order dated January 14, 1991. The said order was challenged unsuccessfully in appeal before the Deputy Commissioner (Appeals), Ghaziabad. The matter was carried in further appeal before the Tribunal and the Tribunal has allowed the appeal of the dealer -opposite party.

(3.) THE question as to whether the security amount will form part of the turnover or not is taken first. In this regard the assessing authority, on examination of the account books, has found that the dealer -opposite party has charged two per cent to four per cent as security in each bill. The stand taken by the dealer is that the security amount has been charged with a view to ensure timely payment by the purchasing dealer, the loss of interest for the late payment of the price thus set -off against the interest amount earned on such security. The assessing authority was of the view that the said amount formed part of turnover and has been separately shown in the bills just to avoid the payment of trade tax due on the part of the sale price. Without making much discussion in the order, the Tribunal took the view that since the account books of the dealer have been accepted and the disclosed turnover has not been disputed by the Department, it shows that there is no suppression of sales and as such, if the dealer has charged some amount by way of security and has separately shown the amount in the bills, it will not form part of the turnover.