The disputed charges form part of the sale price and are liable to be included in the taxable turnover. The absence of wilful non-disclosure and the presence of a bona fide doubt regarding the inclusion of the disputed amounts in the sale price led to the cancellation of penalties.

N.V. BALASUBRAMANIAN, J.

These tax revision petitions are filed against the orders of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, for the assessment years 1987-88 and 1988-89, wherein the Tamil Nadu Sales Tax Appellate Tribunal allowed the appeals preferred by the assessee and dismissed the enhancement petitions filed by the State.

2. The respondents (hereinafter referred to as the assessee) had reported for the assessment year 1987-88 the total and taxable turnover of a sum of Rs.81,047/- under the provisions of the Central Sales Tax Act, 1956, and the assessing officer determined the total turnover at Rs.2,13,412, which was also the taxable turnover for that year. The assessee had reported for the assessment year 1988-89 a total and taxable turnover of Rs.1,39,589/- and Rs.60,393/- respectively, but the assessing officer has determined the total and taxable turnover at Rs.2,13,412/-

3.The difference in the determination of total taxable turnover for the two assessment years in question arose due to the following circumstances. The assessee was the licence holder to mine the minerals at Nadanthai village in Namakkal taluk in Salem District and the assessee also had its own crushing unit in the above place. The assessee after unearthing the stones from the mines at Nadanthai transported the same from the said mines to the grinding unit, ground the stones there at its own risk and sold the calcite powder and lime stones both within and outside the State of Tamil Nadu.

4.The dispute is in relation to the inclusion of grinding charges, loading and unloading charges, transport charges and freight charges in the taxable turnover. The place of the business of the assessee was inspected by the officials of the Enforcement Wing, Salem and they found that there were serious defects in the maintenance of the accounts by the assessee. During the course of investigation, the Inspecting Officials unearthed a bill book relating to the business of the assessee for the assessment years 1987-88 and 1988-89 and there was proof to show that the assessee had actually sold the finished products to the purchasers. According to the assessee, it transported the minerals quarried from the mines to their grinding unit for grinding at the risk of the purchaser and sold the same to the purchasers after grinding them. The assessing Officer found that the assessee had issued a proforma invoice at the time of despatch of the finished products from their grinding unit to the purchasers through lorry and after the sale was concluded the said proforma invoices were handed over to the lorry driver. It was also found that the said proforma invoices were not accounted for by assessee in its accounts. The assessee had subsequently prepared sale bills for the above despatches separately showing the material costs, sales tax, Central Sales Tax, grinding charges, loading and unloading charges and transport charges paid and claimed that the turnover relating to grinding charges etc., do not form part of the turnover of the assessee. It was found that the sale bills have been issued by the assessee after the despatch of the finished products from their grinding unit together with the proforma invoices and the assessee had not accounted for the sale bill issued by them in their accounts. The assessing officer found that the proforma invoices prepared by the assessee showed that they sold the powder and not the raw material. The assessing officer came to the conclusion that the grinding charges, loading and handling charges, freight charges were pre-sale expenses incurred by the assessee and the assessee had prepared the sale bill as if he had sold the raw material and the expenses have been incurred at the risk of the buyers on payment of necessary charges. He therefore held that the turnover relating to grinding charges, loading and handling charges and freight charges are liable to be included as part of the total and taxable t