Appeal No 88 of 1959
Appeal by special leave from the judgment and order dated May 6 1958 of the Industrial Tribunal Delhi in 0
P No 54 of 1958
MC Setalvad Attorney General for India section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for the appellant
Janardan Sharma for the respondent
March 10
The Judgment of the Court was delivered by WANCHOO J
This is an appeal by special leave in an industrial matter
The appellant is a company carrying on the manufacture of textiles
The respondent Kushal Bhan was in the employ of the company as a peon
It appears that the cycle of Ram Chandra Head Clerk of the Folding Department was stolen on August 24 1957
The matter was reported to the police
Sometime later the cycle was recovered from the railway station cycle stand at the instance of the respondent who took the police there and picked out 229 the stolen cycle from among 5060 cycles standing there
This matter was apparently brought to the notice of the company in October 1957 and thereupon a charge sheet was served on the respondent to the effect that he had stolen the cycle of Ram Chandra Head Clerk that it had been recovered at his instance and that a criminal case was pending against him with the police
He was asked to show cause why he should not be dismissed for misconduct
The respondent submitted his explanation on October 13 1957
As his explanation was unsatisfactory November 14 1957 was fixed for enquiry
The respondent appeared before the enquiry committee but stated that as the case was pending against him he did not want to produce any defence till the matter was decided by the court
He further stated that he did not want to take part in the enquiry and was not prepared to give any answers to questions put to him
When questions were put to him at the enquiry he refused to answer them and eventually he left the place
The company however completed the enquiry and directed the dismissal of the respondent on the ground that the misconduct had been proved against him
Thereafter an application was made under section 332 of the Industrial Disputes Act No 14 of 1947 by the company to the tribunal for approval of the action taken against the respondent
The matter came before the tribunal on May 6 1958
In the meantime the respondent had been acquitted by the criminal court on April 8 1958 on the ground that the case against him was not free from doubt
The copy of the judgment of the criminal court was produced before the tribunal and it refused to approve the order of dismissal
The company thereupon applied for special leave to this Court resulting in the present appeal
The main contention on behalf of the appellant company is that the company was not bound to wait for the result of the trial in the criminal court and that it could and did hold a fair enquiry against the respondent and if the respondent refused to participate in it and left the place where the enquiry was being held the company could do no more than to complete it and come to such conclusion as was 230 possible on the evidence before it
Learned counsel for the respondent on the other hand urges that principles of natural justice require that an employer should wait at least for the decision of the criminal trial court before taking disciplinary action and that inasmuch as the employer did not do so in this case the employee was justified in not taking part in the disciplinary proceedings which dealt with the very same matter which was the subject matter of trial in the criminal court
It is true that very often employers stay enquiries pending the decision of the criminal trial court and that is fair but we cannot say that principles of natural justice require that an employer must wait for the decision at least of the criminal trial court before taking action against an employee
In Shri Bimal Kanta Mukherjee vs Messrs Newsman s Printing Works 1 this was the view taken by the Labour Appellate Tribunal
We may however add that if the case is of a grave nature or involves questions of fact or law which are not simple it would be advisable for the employer to await the decision of the trial court so that the defence of the employee in the criminal case may not be prejudiced
The present however is a case of a very simple nature and so the employer cannot be blamed for the course adopted by him
In the circumstances there was in our opinion no failure of natural justice in this case and if the respondent did not choose to take part in the enquiry no fault can be found with that enquiry
We are of opinion that this was a case in which the tribunal patently erred in not granting approval under section 332 of the Industrial Disputes Act
Besides it is apparent that in making the order under appeal the tribunal has completely lost sight of the limits of its jurisdiction under section 332
We therefore allow the appeal and setting aside the order of the tribunal grant approval to the order of the appellant dismissing the respondent
In the circumstances we pass no order as to costs
Appeal allowed


Summary:
The appellants assessees in the first set of appeals were selling agents of appellants in the second set of appeals
For the assessment year 1996 70 they were assessed to sales tax on taxable turn over of Rs 23766245 which included an amount of Rs 2971527 representing freight charges
The assessee claimed exclusion of freight charges in computing the taxable turnover on the ground that freight had been independently charged in the invoices
This was rejected by the assessing authority the appellate authority as well as Tribunal
Aggrieved the assessee preferred revisions to the High court
The High court held that in cases arising under the Central sales Tax Act the freight packing charges and excise duty on packing materials had to be included in the sale price for the computation of sales tax that in cases arising under the Tamil Nadu General sales Tax Act and Tamil Nadu Additional sales Tax Act freight packing charges and excise duty on packing materials were not liable to be included in the sale price for the computation of the sale price and that the assessees were not liable to pay additional sales tax on freight packing materials and excise duty on packing materials in the cases arising under the Tamil Nadu Additional sales Tax Act
Aggrieved both the as well as well as the state Government filed appeals before this Court
On behalf of the state it was contended that the High court having held that the amounts in question were liable to the included in the turnover for purposes of Central sales Tax Act ought to have also held that these amounts were liable to be included in the taxable turnover for purposes of Tamil Nadu General sales Tax Act and the Tamil Nadu Additional sales Tax Act also and relief granted for purposes of the local sales tax was erroneous
On behalf of the assessees it was contended that even for the purpose of CST the freight charges the cost of packing materials and the excise duty on the packing materials should have been excluded in the computation of the taxable turnover that the Cement Control order under the terms of which sales of cement were effected during the relevant period by all cement manufacturers had no relevance to the question at issue that all that the cement control order laid down was that Cement could not be sold at a price higher than a price fixed by the cement control order on terms described  as free on rail FOR  destination  that the order did not stand in the way of cement manufacturers charging a price less than the ceiling fixed under the order nor did it preclude individual contracts by the cement manufacturers with various purchasers that the latter should bear the freight charges that the assessees had and that the assessees had entered into contract with the purchasers which clearly stipulated that the freight would be payable by the latter as per terms and condition of sale the instant case was one where despite the terms of the control order the assessees chose to sell the goos free on rail at the point where the goods were loaded on rail and that the liability to pay freight was entirely that of the purchasers  and that these contracts were not inconsistent with or repugnant to the terms of the cement control order and therefore the assessees were entitled to exclude the amounts of freight as not forming the part of the turnover at all
Allowing the appeals of the state and dismissing those of the appellant dealers this court HELD 1
The freight charges should be included in arriving at the taxable turnover for purposes of Central sales Tax as Tamil Nadu sales Tax Act and the packing charges and excise duty thereon should also be included in arriving at the tax able turnover or purposes of both central sales Tax and Tamil Nadu sales Tax
94 DE 21 The whole purpose of the cement control order was that cement should be available for sale at all places in the country at a controlled price
No doubt the price was described as a maximum beyond which the sale price could not go but the intention which was also carried out by all the suppliers was that cement was to be sold at what may be described as a controlled price on terms free  on rail destination 
In other words the producer was entitled to the controlled price irrespective of the amount of freight which might have been incurred in respect of the transaction
Having regard to the fact that the freight on consignments to places near the factory and consignments places far away from the factories could show a lot of variation the control order created a machinery by which all freight charges were credited to a common account and any particular cement manufacturer incurring more than a specified amount was entitled to the reimbursed for the excess freight incurred by him
The whole control order proceeds on the footing that the freight charges are to be met by the producer and that he was entitled to a consolidated price irrespective of the freight he may have incurred
Hence the sale price on the terms of the Central sales Tax Act could only be the controlled price as fixed by the Cement control order
87 F H 88 A C Hindustan Sugar Mills Ltd vs State of Rajasthan 1979 43 STC13 relied on
Hyderabad Asbestos Cements products Ltd vs State of Andhara Pradesh 1969 24 STC487 distinguished
22 The High court was therefore fully justified in denying the benefit of deduction of freight charges from the controlled price to arrive at the turnover of the assessee for ter purpose of the central sales Tax Act
89 C 31
In coming to the different conclusion in respect of the local Act from that reached in respect of the Central Act  viz that since freight was one of the items specified in clause i of Rule 6 c of Tamil Nadu General sales Tax Rules 1959 and since the assessees had specified and charged for freight separately in their invoices they were entitled to the deduction of the freight in the computation of the taxable turnover the High court has over looked the significance of the inclusion of the words  without including them in the price of the goods sold in clause c of the Tamil Nadu General Sales Tax Rules
These words make it clear that the freight charges are not to be deducted in the computation of the taxable turnover merely because they are specified and charged for separately by the dealer90 GH 91 A 32
A further pre requisite for their deduction is that these charges should not have been included in the price of the goods sold
Once it is concluded that freight has been included as part of the price sold and that the liability to pay the freight remains with the dealer though permitted to be set off against the sale price by the purchaser or consumer it follows that the deduction of the freight as separate item in the computation of taxable turnover is not permissible
Rule 6c will apply only in cases where the sale price charged does not include the freight charges and the dealer separately collect freight from the consumer without including the same in the sale price
The High court was therefore in error in excluding freight charges from the taxable turnover for the purpose of the Tamil Nadu Act
91 A C 93 F Tungabhadra Industries Ltd vs Commercial Tax officer Kurnool 1990 11 STC 827 Dyer Meakin Breweries Ltd vs State of Kerala  1970 26 STC 248 Johar  sons p Ltd vs sales Tax officer Ernakulam 1971 27 STC120 CCT V Ashok Marketing Ltd 1973 32 STC411 State of Mysore vs Panyam cements and Mineral Industries Ltd 197433 STC 407 State of Tamil Nadu vs Parry and company1976 38 STC122 State of Tamil Nadu vs Chettinad cement Corporation Ltd 1976 38 STC519 and premier Breweries Ltd vs state of Karnataka 1984 56 STC 14 relied on
The position in regard to packing charges as well as the excise duty thereon is also no different
Packing charges from part of  sale price because the expression  any sum charged for anything done by the dealer in respect of the goods used in the definition in Section 2h of the central sales Tax Act
Nor will the assessee be in a position to claim a deduction in respect of these charges by virtue of Rule 6c of the Sales Tax Rules
Therefore the packing charges and excise duty thereon cannot also be deducted in computing the taxable turnover for the purpose of the Tamil Nadu Acts93 G H 94 A C Hindustan Sugar Mills Ltd vs State of Rajasthan  ors
 1979 43 STC 13 and Commissioner of sales Tax vs Rai Bharat Das  Bros1988 71 STC 277 SC relied on
State of Tamil Nadu vs Vanniaperumal  Co 1990 76 STC203 Dalmia Cement Bharat Ltd vs State of Tamil Nadu 1991 81 STC 327 Dalmia Cement Bharat Ltd vs State of Tamil Nadu 1991 83 STC442 approved