Nuchem Plastics Ltd. vs The State of Haryana

M.R. Sharma, J.—The Sales Tax Tribunal has referred the following five questions to us for our opinion u/s 42 of the Haryana General Sales Tax Act, 1973.

(i) Whether, on the facts and in the circumstances of the petitioner''s case, when the price was quoted f.o.r. destination but the railway freight was always paid by the customers, it is open to the sales tax authorities to treat railway freight as forming part of the price of goods sold and levy tax thereon ?

(ii) Whether, on the facts and in the circumstances of the petitioner''s case, when railway freight is admittedly not made a part of the price of the goods sold, it is open to the sales tax authorities to levy tax on the railway freight ?

(iii) Whether, on the facts and in the circumstances of the petitioner''s case, the petitioner was bound to quote and charge price inclusive of railway freight ?

(iv) Whether, in view of the course, conduct and procedure of the sale transactions and from the conduct of the petitioners and its customers, the sales tax authorities should have inferred an agreement between the petitioner and its customers to the effect that the latter were bound to pay the railway freight ?

(v) Whether, in view of the facts of the petitioner''s case, the payment of the railway freight by the customers amounted to an implied stipulation that the railway freight would be paid by the customers ?

The manner in which question No. (ii) has been framed shows that, admittedly railway freight is not made part of the price of the goods sold. Obviously, therefore, the sales tax authorities could not, with any justification, impose sales tax on amount spent as railway freight because sales tax is to be imposed on the price of the goods sold. The view which we have taken finds further support from a judgment of their Lordships of the Supreme Court in Hyderabad Asbestos Cement Products Ltd. Vs. State of Andhra Pradesh, .

We, accordingly, answer all the questions in favour of the assessee and against the revenue. No costs.