M/S. UNIVERSAL CYLINDERS LIMITED versus THE COMMERCIAL TAXES OFFICER

Citation: [2018] 2 S.C.R. 508 · Decided: 23-02-2018 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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508
SUPREME COURT REPORTS
[2018]  2 S.C.R.
M/S. UNIVERSAL CYLINDERS LIMITED
v.
THE COMMERCIAL TAXES OFFICER
(Civil Appeal No(s). 2431 of 2018 etc.)
FEBRUARY 23, 2018
[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Rajasthan Sales Tax Act, 1994: ss.2(39), 2(44) – Refund of
sales tax – Appellant-assessee manufacturer of cylinders for storage
of LPG supplied the entire production to Government owned
companies – The cost of the cylinders was to be determined by the
Ministry of Petroleum and Natural Gas (MOP & NG) under the
pricing policy –  IOC placed an order for supply stating in the
supply order to charge a provisional price of Rs.682 per unit and
that pricing formula was under review by the Government and the
final prices applicable after 1.7.1999 would be only as per approval
of MOP & NG – Accordingly appellant-assessee supplied the
cylinders – On 31.10.2000, IOC sent letter to appellant that after
review of the prices, cylinders have again been provisionally revised
to Rs.645 per unit w.e.f 1.7.1999 – Thereafter oil companies
deducted/adjusted excess payment of Rs.37 and proportionate sales
tax thereon from the payments due to the assessee – Claim for refund
of sales tax on the excess amount of Rs.37 – Entitlement for – Held:
s.2(39) defines “sale price” as a price which is either paid or payable
to a dealer as consideration for sale –  The definition itself makes it
clear that any sum by way of any discount or rebate according to
the practice normally prevailing in the trade would be deducted
and not be included in the sale price – The definition of ‘turnover’
means the aggregate amount received or receivable by a dealer –
In the instant case, when the orders were placed with the assessee,
the price was not finalized – There was a clear cut stipulation in the
purchase order that price of Rs.682/- was only a provisional subject
to review and the final price applicable after 01.07.1999 would be
the price as approved by the MoP & NG – Therefore, though the
assessee may have received Rs.682 per cylinder, it was under a
legal obligation only to receive that price which was fixed by the
MoP & NG – Assessee had to refund the amount of Rs.37/- per
[2018] 2  S.C.R. 508
508
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cylinder to the oil companies – Therefore, it actually received only
Rs.645 per cylinder – The price fixation is not in the hands of the
assessee – It is not even in the hands of the oil companies – The
price is fixed by the MoP & NG and in such an eventuality, the
amount actually payable is the amount to be fixed by the MoP &
NG and that is also the amount which the assessee is legally entitled
to receive – The assessee is entitled to refund of the amount of sales
tax paid on the excess amount.
Allowing the appeals, the Court
HELD: It is undisputed that the assessee had to refund
the amount of Rs.37/- per cylinder to the oil companies.
Therefore, what it has actually received is only Rs.645/- per
cylinder.  What was legally receivable by it was the amount to be
finally fixed by the MoP & NG i.e. Rs. 645/- per cylinder.  In the
supply order only a provisional price was fixed.  The price fixation
is not in the hands of the assessee.  It is not even in the hands of
the oil companies. The price is fixed by the MoP & NG and in
such an eventuality, the amount actually payable is the amount to
be fixed by the MoP & NG and that is also the amount which the
assessee is legally entitled to receive. The assessee shall be
refunded the amount of sales tax paid on the excess amount.
The order of the Deputy Commissioner is restored.   [Paras 17,
18]  [514-B, D]
IFB Industries Limited v. State of Kerala [2012] 4 SCR
802 : 2012 (4) SCC 618; ONGC  v. State of Gujarat
2014 SCC Online Guj 15385; Gail India Ltd. v. State
of M.P. (2014) 72 VST 161; MRF Ltd. v. Collector of
Central Excise, Madras(1997) 5 SCC 104 – referred to.
Case law reference
[2012] 4 SCR 802
referred to
Para 12
(2014) 72 VST 161
referred to
Para 13
(1997) 5 SCC 104
referred to
Para 14
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2431
of 2018.
From the Judgment and Order dated 27.02.2015 of the High Court
M/S. UNIVERSAL CYLINDERS LIMITED v. THE
COMMERCIAL TAXES OFFICER
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SUPREME COURT REPORTS
[2018]  2 S.C.R.
of Judicature for Rajasthan at Jaipur in S. B. Sales Tax Revision Petition
No. 59 of 2006.
WITH
C. A. Nos. 2432, 2433 and 2434 of 2018
Sameer Jain, Ms. Anu Sura, Angad Sandhu, Love Kumar Gupta,
Rabin Majumdar, Advs. for the Appellant.
Amit Sharma, Sandee

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