INDIA POTTERIES LIMITED AND ANR. Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, TALTALA CHARGE AND ORS.

JUDGEMENT

(1.) PETITIONER No. 1 is a public limited company incorporated under the Companies Act, 1956 and at the material point of time was engaged in the business of manufacturing and selling ceramic electrical insulators (hereinafter referred to as, "the insulators"). In course of its business Petitioner No. 1 -company entered into agreement with the West Bengal State Electricity Board (in short, "SEB") to manufacture insulators in accordance with the specification of the SEB and to sell such insulators to it.

(2.) SEB floated tender notices seeking offers from manufacturers of insulators for the purpose. In response to such tender notice Petitioner No. 1 -company submitted offers. Upon acceptance of such offers SEB placed orders with Petitioner No. 1 -company for manufacture, supply and delivery of insulators in accordance with the terms and conditions of the agreements. In its offers Petitioner No. 1 -company quoted ex -works price of the insulators, freight and insurance charges, and other charges like excise, sales tax separately.

(3.) MR . Khaitan, learned senior advocate appearing for the Petitioners have submitted that the property in the insulators got transferred to the SEB as soon as those insulators upon testing and acceptance by the officers of the SEB were separated, ascertained and appropriated to the contract in the factory/workshop of Petitioner No. 1 -company and Petitioner No. 1 -company acted merely as agent of the SEB in transporting the ascertained and appropriated insulators from the factory/workshop to different sites/ stores of the SEB. He has further submitted that the transportation being a post sale event payment received as transportation charges was nothing but reimbursement of the cost of transportation at the agreed rate and could not form part of the "sale price" as defined in Section 2(31) of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as, "the 1994 Act").