ASIATIC GASES LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) BEING aggrieved by the order of the Orissa Sales Tax Tribunal (for short, 'the Tribunal'), petitioner had filed a reference application and the same having been rejected, it has moved this Court for directing the Tribunal to state a case and this Court has directed the Tribunal to state a case on the following question of law ; 'Whether, in the facts and circumstances of the case, the amount received by the petitioner on account of delay in return of cylinders by its purchasers can be held to be taxable under Section 2(g)(iv) of the Orissa Sales Tax Act, 1947 ?'.

(2.) PETITIONER is a registered dealer and carries on business in manufacture and sale of medical oxygen and industrial gases amongst other things. Industrial gases and medical oxygen are sold by filling in cylinders. During the year 1986 87 petitioner has collected Rs. 42,496.50 from its customers towards charges for over detaining cylinders. It has claimed the same consideration as not a part of sale price on the ground that the amount received for over detention of cylinders does not form a part of sale price. The assessing officer levied sales tax on the ground that the same are nothing but consideration for transfer of right to use cylinders by manufacturer dealer to its customers and accordingly taxed the same at 8 per cent. Being aggrieved by the aforesaid order, petitioner preferred an appeal before the Assistant Commissioner. It was urged before him that the amount which has been received for over detention of cylinders is nothing but penalty and does not fall within the meaning of Section 2(g)(iv) of the Orissa Sales Tax Act, 1947 (for short 'the Act') so as to attract levy of tax. The argument of the petitioner did not find favour with the Assistant Commissioner who confirmed the order of the assessing officer. The petitioner thereafter preferred second appeal before the Tribunal. The Tribunal held the same as 'rental of cylinders' for transferring right to use for cylinders by the dealer to the customers and held that consideration received towards sale enumerated in Section 2(g)(iv) of the Act, which was rightly taxed.

(3.) PETITIONER has filed one sample copy of the bill charged for over detention of the cylinders which indicated that the same was collected as detention charges. Prom a reading of the contract, the following aspects emerge.