INDIAN OXYGEN LTD Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE tax revision cases are filed against the orders of the Sales Tax Appellate Tribunal (Main Bench) in T.A. Nos. 1235 of 1992, 983 of 1992, 671 of 1992 and 1277 of 1992 dated November 3, 1993. The appellant is a dealer in gases and oxygen. The assessments relate to the years 1986 -87 to 1988 -89. The disputes raised in these revision petitions are as follows :

(2.) THE facts leading to the present revisions in respect of the disputed items are as follows :

(3.) HE argued that the terms and conditions clearly specify in condition No. 6.1. that when gases are supplied in customers own cylinder, there is no collection of any cylinder holding charge and that only charges for servicing cylinders are collected for various services rendered as stated in the condition. However, only when gas is supplied in company owned cylinders, a cylinder holding charge is collected as contemplated in condition 1.1. However, as stated in condition 5.1. the company owned cylinders are given to the customers for use of the gas contained in them. The customers have no right to use or deal with the cylinders in any manner whatsoever but merely to retain them in their custody for the purpose of using the gas contained in them. Further, the collection of cylinder holding charge depends on the duration of the usage of the cylinder by the customers. Thus, apparently, there is no consideration for the supply of cylinders for use of gas contained therein. There is no change in the price charge for gases whether supplied in company owned cylinders or in the cylinders owned by the customers. In such circumstances, there is absolutely no case to include the cylinder holding charges along with the gas turnover so as to assess at 10 per cent as held by the Sales Tax Appellate Tribunal. In [1989] 72 STC 118, in the case of Collector of Central Excise, Madras v. Indian Oxygen Limited "the assessee in the present case" the Supreme Court has considered the levy of Central excise duty on cylinder rentals collected by the assessee. The Supreme Court categorically held that the excise levy was on the manufacture of goods it is chargeable with reference to the price at which the goods are ordinarily sold. The Supreme Court categorically held that there were two different supplies - -one is supply of gases and the other is incidental supply of cylinders for rent. On that basis, the Supreme Court held that the Central excise duty leviable was only on the value of gases supplied and not on the rentals. In view of the categorical assertions of the Supreme Court in identical circumstances, the decision of the Sales Tax Appellate Tribunal in upholding the view of the first appellate authority that there is one indivisible contract of sale is totally erroneous. Thus, there is absolutely no case to including the value of cylinder holding charges along with gases so as to hold that there is an indivisible contract of sale and that the entire receipts include rentals have to be assessed to tax at 10 per cent under Section 3(2) of the Tamil Nadu General Sales Tax Act, 1959.