IMPORTANT POINT
The freight and handling charges are to be treated as included within the words money consideration in Section 2(d) of the West Bengal Sales Tax Act, 1954 which defines sale price .

Headnote:West Bengal Sales Tax Act, 1954-Section 2(d)-Words money consideration -Sale price-Definition-Whether freight and handling charges, described as freight charges or delivery charges , are to be treated as included within words money consideration in Section 2(d) ?-(Yes)-First part of definition defining the meaning of the word sale price , must be given its ordinary, popular or natural meaning-Interpretation thereof is in no way controlled or affected by second part which includes certain other things in the definition-Inclusive part of definition cannot prevent the main provision from receiving its natural meaning-Test as to what was the consideration passing from purchaser to dealer for sale of goods.
       Held that the definition of sale price in Section 2(d) uses the words means and includes . The first part of the definition defines the meaning of the word sale price and must, in our view, be given its ordinary, popular or natural meaning. The interpretation thereof is in no way controlled or affected by the second part which includes certain other things in the definition. This is a well-settled principle of construction. Therefore, the inclusive part of the definition cannot prevent the main provision from receiving its natural meaning. (Para 7)
       In view of the above principle of construction, the first part of the definition of sale price in Section 2(d) of the 1954 Act must be given its own meaning and the respondent s counsel is therefore right in urging that the first part of Section 2(d) which is similar to the first part of Section 2(p) in the Rajasthan Sales Tax Act, 1954, must be given the same meaning given to similar words in Hindustan Sugar Mills Ltd. v. State of Rajasthan, 1978(4) SCC 271. (Para 8)
       Further held, the exclusionary words in Section 2(h) of the 1941 Act were only intended to exclude certain specific things which were otherwise within the first part or such exclusion could also be ex abundante cautela. The non-inclusion of freight charges expressly in the 1954 Act has no impact on the natural meaning of the first part of Section 2(d) just as the exclusion of packaging charges in Section 2(d) does not have any impact on the first part of the same Section 2(d). The first part of the definition remains to have its natural meaning unaffected by what other things are expressly included in the second part; and is also unaffected by what is not expressly included. Therefore, neither the inclusion of package charges in Section 2(d) of the 1954 Act nor the exclusion of freight charges from Section 2(h) of the 1941 Act and the absence of any such express inclusion of freight charges in the 1954 Act does not, in our view, alter or affect whatever meaning is to be attributed to the first part of the 1954 Act which is similar to the first part of Section 2(p) on the Rajasthan Act, 1954. (Para 9)
       In the discussion by this Court in the above case reference was made to the freight expenses of a dealer who transported goods from the factory to his place of business. But this does not mean that this Court did not intend that freight expenses upto the point of delivery were not to be included in sale price . (Para 10)

JUDGMENT

M. Jagannadha Rao, J.-The West Bengal Taxation Tribunal, by order dated 26.9.1991 dismissed the applications R.No. 354 of 1990, 130 of 1991, 415 of 1989 and 431 of 1989 and Civil Appeals 1083 of 1992 to 1086 of 1992 are filed against the dismissal of the said applications.

2. The issue involved in these appeals is whether the freight and handling charges, hereinafter described as "freight charges" or "delivery charges", are to be treated as included within the words "money consideration" in Section 2(d) of the West Bengal Sales Tax Act, 1954 (hereinafter called the 1954 Act) which defines "sale price".

3. According to the appellants, freight charges cannot be included in the meaning of the word money transaction in the definition of sale price in Section 2(d) in as much as it was not the intention of the legislature to treat the said charges as part of the "money consideration". It is the case of the appellants that the material on record and the conduct of the parties and in particular, the Cash Memo No. 97751 exhibited in the case which shows that delivery charges were separately collected as distinct from the cost of goods, was evidence that they were not part of the sale price . It is also the case of the appellants that Section 2(d) of the 1954 Act specifically includes in the definition of sale price any sum charged for containers or other materials for the packing of the notified commodities and in the absence of a similar inclusion of freight charges such charges must, by implication be treated as outside the sale price . Learned counsel also submitted that under Section 2(h) of Bengal Finance (Sales Tax) Act 1941 - which applies to non-specified goods - the definition of sale price specifically excluded delivery charges if separately charged and the 1954 Act must have, of necessity, contained a specific clause including freight charges within the meaning of sale price . Otherwise these charges would not be part of sale price . Learned counsel for the appellant placed strong reliance on the decision of this Court in Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh1.

4. On the other hand, the learned counsel for the respondent pointed out that the majority of the Tax Tribunal has held that, on facts, the obligation of paying the freight charges was on the appellant - sellers and therefore the same must be treated as included in the sale price under Section 2(d). Learned counsel relied upon the decision of this Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan2, to contend that the first part of Section 2(p) defining sale price in the Rajasthan Sales Tax Act 1954 was in pari materia with the first part of the definition of sale price in the 1954 Act and therefore sale price meant the amount payable to a dealer as consideration for the sale of goods and the test was what the consideration was for the sale. As stated in that Judgment, it was immaterial to inquire how the consideration was made up, whether it included excise duty or sales tax on freight. The question is what is the amount payable by the purchaser to the dealer as consideration for the sale and not what is the net consideration retainable by the dealer. Learned counsel also relied upon T.V.L. Ramco Cement Distributing Co. Ltd. v. State of Tamil Nadu3.

5. The 1954 Act generally provides for levy of a single point tax at the first stage on commodities notified under Section 25 of that Act. On the other hand, the 1941 Act is a general statute providing for multi-point levy of sales tax on commodities not covered by the 1954 Act. Sub-clause (d) of Section 2 of the 1954 Act reads as follows :

"S. 2(d) "Sale-price used in relation to a dealer means the amount of the money consideration for the sale of notified commodities manufactured, made or processed by him in West Bengal, or brought by him into West Bengal from any place outside West Bengal, for the purpose of sale in West Bengal, less any sum allowe

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1997 Supreme(SC) 1238

IMPORTANT POINTThe freight and handling charges are to be treated as included within the words money consideration in Section 2(d) of the West Bengal Sales Tax Act, 1954 which defines sale price .

Cases Referred (4)

IMPORTANT POINT
The freight and handling charges are to be treated as included within the words money consideration in Section 2(d) of the West Bengal Sales Tax Act, 1954 which defines sale price .