The main legal point established in the judgment is that transportation charges should be included in the sale price of goods under the Orissa Sales Tax Act only if there is evidence showing that the dealer had separately charged and collected the transportation charges.

ORDER

Dr. S. Muralidhar, CJ. - In the present revision petition which arises out of an order dated 18th September 2006 passed by the Orissa Sales Tax Tribunal, Cuttack (Tribunal) in SA Nos.2054-2055 of 1992-93 (State of Orissa v. M/s. S. Chander) and S.A. Nos.625-626 of 1992-93 (M/s.S. Chander v. State of Orissa) for the assessment year 1987-88, the following questions of law were framed for consideration by this Court by its order dated 4th December, 2006:

(i) Whether in the facts and circumstances of the case, the Tribunal is justified to direct addition of transportation charges to the sale price of the goods under the provisions of Orissa Sales Tax Act?

(ii) Whether in the facts and circumstances of the case, there is nexus to sustain enhancement of turnover made by the Tribunal?

2. At the outset, Mr. Jagabandhu Sahoo, learned Senior Advocate appearing for the Petitioner states that the Petitioner is not pressing Question No.(ii) and is only pressing Question No.(i).

3. Relevant to Question (i), the Sales Tax Officer (STO), Sambalpur in the assessment order dated 31st January 1990 for the aforementioned year noted the submissions of the Petitioner (dealer) that the goods were delivered at factory site to the buyer who transported the goods (cement) at his own cost. The case of the Petitioner was that it, therefore, was not liable to pay tax on the transportation charges since it had not received any payment for transportation of cement. Nevertheless, the STO concluded that the total cost of the goods including transit and incidental expenditure till the delivery of the goods at the destination point of the purchaser would constitute the actual sale price. It was concluded that the dealer was in fact incurring the transportation charges, but was passing on the same 'with a view to avoiding tax'.

4. The matter then went in an appeal to the Assistant Commissioner of Sales Tax (ACST). The ACST by the order dated 30th March 1991 agreed with the dealer that 'there is absolutely no evidence that the Appellant used to transport the cement to the customers' place and collected freight charges and avoided payment of tax on the same (freight charges).' Accordingly, the tax assessed by the STO on transportation charges was deleted by the ACST.

5. The matter then travelled to the Tribunal at the instance of both the Department (as far as the above issue of transportation charges was concerned) and the Dealer (as far as the other issues were concerned). By an order dated 23rd May 2000, the Tribunal allowed the appeal filed by the State and dismissed the appeal filed by the dealer. The dealer was in fact not present before the Tribunal when the above order was passed. The dealer's application for restoration of the appeal was dismissed by the Tribunal by the subsequent order dated 15th/22nd August, 2002.

6. The dealer then filed W.P.(C) No.4717 of 2002 in this Court. By a judgment dated 6th August 2003, this Court set aside the above orders of the Tribunal and remanded the matter to the Tribunal for a fresh hearing.

7. It was thereafter that the impugned order dated 18th September 2006 was passed by the Tribunal. On the issue of transportation charges, the Tribunal observed as under in the impugned order:

'6. First we shall examine whether the transportation charges should form part of the sale price. The term 'Sale Price' means the amount payable to a dealer as consideration for the sale or supply of any goods, less any sum allowed as cash discount according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before delivery thereof.

So, the point of delivery of the goods to the buyers is to be determined. The transactions, i.e. sales of cement, are admittedly intra-State sales. Those are not being inter-State sales it is to be construed that the buyers used to get delivery of the goods only after the goods reached the respective destinations of the buyers inside O