The cost of freight forms part of the 'sale price' within the meaning of the first part of the definition under the Bengal Finance (Sales Tax) Act, 1941.

ORDER :

1. Heard Mr. Dhruv Mehta, learned senior counsel appearing for the appellant and Mr. Soumik Ghosal, learned counsel appearing for the respondents.

2. This appeal is directed against the judgment and order dated 19th January, 2009 in WPTT No.55 of 2008. The High Court dismissed the writ petition preferred by the appellant and affirmed the order of the West Bengal Taxation Tribunal which had disallowed the appellant's claim that certain charges which it had received from the Indian Iron and Steel Company Limited (IISCO) at Burnpur on account of supply of industrial gases through pipeline be treated as facility charges and be kept out of sale price for the purpose of Bengal Finance (Sales Tax) Act, 1941 (for short "the 1941 Act").

3. The High Court has extracted the definition of "sale price" in the relevant Act and has thereafter relied upon a judgment of this Court in Black Diamond Beverages and Another v. Commercial Tax Officer, Central Section, Assessment Wing, Calcutta and Others [(1998) 1 SCC 458].

4. On behalf of the appellant, an attempt was made to distinguish that judgment by pointing out that Black Diamond Beverages (supra) arose out of a subsequent Act, viz., the West Bengal Sales Tax Act, 1954 (for short "the 1954 Act") wherein the term "sale price" has been defined in Section 2(d).

5. No doubt, the aforesaid submission is factually correct, but it does not affect the outcome of this case because in Black Diamond Beverages (supra), in paragraph 9, this Court noticed that first part of Section 2(h) of the 1941 Act defined "sale price", with which we are presently concerned, as well as the first part of Section 2(d) of the 1954 Act as also the first part of Section 2(p) of the Rajasthan Act, 1954 are similar. It was also noticed that the first part of such provisions were interpreted by this Court in the case of Hindustan Sugar Mills v. State of Rajasthan & Others [(1978) 4 SCC 271]. This view also runs totally against the appellant's case.

6. In order to avoid any scope for confusion, we would like to extract paragraphs 9 and 16 of the judgment in the case of Hindustan Sugar Mills (supra), which are as follows:

"9. We may now take another example which is very much near to the one which we have already discussed. The dealer may, instead of transporting the goods from his factory or his place of business and selling them there, enter into a contract of sale F.O.R. destination railway station. Where such a contract is made, the seller undertakes an obligation to put the goods on rail and arrange to have them carried to the destination railway station at his expense. The delivery of the goods to the purchaser in such a case is complete at the destination railway station and till then the risk continues to remain with the dealer. The freight is payable by the dealer since he has to arrange for the goods to be carried by rail to the destination railway station at his expense and there is no obligation on the purchaser to pay the freight. The purchaser is concerned only to pay the agreed price for the delivery of the goods at the destination railway station. The agreed price being inclusive of the freight, it would be a matter of indifference to the purchaser as to what is the amount of freight. Even if there is any fluctuation in the amount of freight, since the making of the contract, the purchaser would have no concern, because he is liable to pay only the agreed price which includes the freight, whatever it be. The dealer may, in such a case, pay the freight and charge the agreed price to the purchaser, or he may obtain a railway receipt on the basis of freight to pay and request the purchaser to pay the freight at the time of taking delivery of the goods from the railway at the destination railway station and give the purchaser credit for the amount of the freight against the agreed price. The latter would merely be a convenient mode of paying the agreed price. Since it is the obligation of the dealer to deliver the g