Advocates:
['M/S JAGABANDHU SAHOO', '', 'N K ROUT', 'R P KARA S C C T']

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IN THE HIGH COURT OF ORISSA AT CUTTACK

STREV No.74 of 2006

M/s. S. Chandar

&.

Petitioner

Mr. Jagabandhu Sahoo, Senior Advocate

-versus-

State of Orissa

&.

Opposite Party

Mr. S.S. Padhy, ASC

CORAM:

THE CHIEF JUSTICE

JUSTICE A.K. MOHAPATRA

Order No.

ORDER

17.11.2021

Dr. S.Muralidhar, CJ.

09.

1. In the present revision petition which arises out of an order dated

18^th 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 4^th 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?

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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 31^st 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 30^th March

1991 agreed with the dealer that <there is absolutely no evidence

that the Appellant used to transport the cement to the customers9

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.

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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 23^rd 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 dealer9s application for restoration

of the appeal was dismissed by the Tribunal by the subsequent

order dated 15^th/22^nd August, 2002.

6. The dealer then filed W.P.(C) No.4717 of 2002 in this Court. By

a judgment dated 6^th 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 18^th 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