THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
T.R.E.V.C. No.3 of 2021
ORDER:(per Hon'ble Sri Justice P.SAM KOSHY)
Heard Mr.Raji Reddy, learned Senior Standing Counsel for the
Department and Mr.Karthik Ramana Puttamreddy, learned counsel for
the respondent. Perused the material available on record.
2. The instant Revision Petition is filed by the State Government assailing the order passed by the Telanagana Value Added Tax Appellate Tribunal (for short 'the Tribunal'), Hyderabad in T.A.No.422 of 2011, dated 15.05.2020.
3. Vide the impugned order, the Tribunal has allowed the appeal of the assessee, so far as the action on the part of the State authorities in levying the tax on the handling charges collected by the assessee for the purpose of providing certain post sale services to the purchasers of the vehicles from the assessee's showroom.
4. Learned State counsel relying upon the decision in the case of Mohd. Ekram Khan & Sons v. Commissioner of Trade Tax, U.P. Lucknow 1, contended that the Tribunal has not property appreciated 1 (2004) 39 APSTJ 150.
2the said judgment and have wrongly extended the benefit to the assessee.
5. The question which was put for consideration before the Tribunal was, whether the handling charges extended warranty charges collected for temporary as well as permanent registration charges by the respondent authorities would form part of pre-sale consideration or post-sale consideration so as to be exigible to tax?
6. The admitted fact evident from the pleadings of either side is that the handling charges that is being collected by the respondent dealer is in respect of certain ancillary charges which is incurred by the purchasers of vehicle. The charges paid are for the purpose of getting the temporary as well as the permanent registration of the vehicle from the concerned transport authorities, so also for the purpose of getting the vehicle duly insured with the concerned insurance company and further the charges are for the purpose of getting warranty extended of the said purchased vehicle.
7. From the aforesaid items referred to, it would be evident that these are the services which are only required post-sale of the vehicle by the dealer to the respective purchaser. Moreover, these are services which are not mandatorily required for the purchaser to avail from the said 3 dealer himself. The purchaser has right and liberty to get things done of his own and in such circumstances, the handling charges would be required to be paid.
8. These very facts were duly considered extensively by the Tribunal while considering the contention of the Department. The Tribunal has taken into consideration the provisions of law and has also relied upon a decision of the Bombay High Court in the case of Additional Commissioner of Sales Tax, VAT-III, Mumbai V. Sehgal Autoriders Pvt. Ltd., 2. In the said case also, the issue before the Bombay High Court was, whether handling or service charges received by the authorized dealers from the customers for the aforementioned works would constitute part of the sale price or not? The Bombay High Court had after thorough discussion on the issue negated the contention of the Government and had held that such charges would not be exigible to tax.
9. Given the said facts and circumstances of the case, we are of the considered opinion that the finding arrived at by the Tribunal cannot in any circumstance held to be un-reasonable or contrary to any of the statutory provisions. We also do not find any substantial question of 2 (2011) 43 VST 398.
4law made out by the State Government calling for an interference with the impugned order. Thus, the Tax Revision Petition fails and is accordingly rejected.
10. As a sequel, miscellaneous applications pending if any, shall stand closed. No order as to costs.
_________________ P.SAM KOSHY, J _________________ N.TUKARAMJI, J 08.11.2023 Aqs