COMMISSIONER OF SALES TAX Vs. RANABHAI BHANJI

JUDGEMENT

(1.) This is a reference under section 34(1) of the Bombay Sales Tax, 1953, made at the instance of the Commissioner of Sales Tax. The question which has been submitted to us in this reference is :

(2.) The facts which have given rise to this reference are that the respondent-firm carries on the business of manufacturing bricks. The respondent-firm had entered into a contract with the Housing Commissioner, Bombay, of the Maharashtra Housing Board for the supply of bricks, the terms of which contract have been recorded in the undated letter of acceptance from the Housing Commissioner to the offer made by the respondent-firm by its letter dated 7th November, 1958. Under the said contract the respondent-firm had to supply to the Housing Commissioner 50,00,000 kiln burnt bricks at the rate of Rs. 48 per 1,000 bricks "inclusive of all taxes, etc." The said contract further provided as follows :

(3.) While submitting their invoices to the Housing Commissioner the respondent-firm splitted up the said rate of Rs. 48 per 1,000 kiln burnt bricks into two items, namely, Rs. 33.60 as the price of 1,000 bricks and Rs. 14.40 as the cartage for 1,000 bricks. The Housing Commissioner made payment of the amounts of the invoices submitted by the respondent firm without raising any objection to the splitting up of the price as aforesaid. In its assessment for the assessment periods 1st April, 1958, to 31st December, 1959, 1st April, 1959, to 31st December, 1959, the respondent-firm contended that the amount Rs. 14.40 per 1,000 bricks charged as cartage in the invoices submitted by the respondent-firm should not be included in its turnover of sales. This contention of the respondent-firm was rejected by the assessing authority as also by the Assistant Commissioner in appeal and by the Deputy Commissioner in revision. In further revision to the Sales Tax Tribunal, however, the Tribunal accepted the contention of the respondent-firm and held that the respondent-firm was entitled not to include in its turnover of sales the aggregate amount charged in the respondent-firm's invoices as cartage charges.