THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN T.REV.C.No.269 OF 2010 Dated:29.10.2010 Between: M/s.Charminar Bottling Company Private Limited, Hyderabad .. Petitioner And The State of Andhra Pradesh, rep., by the State Representative before the Sales Tax Appellate Tribunal, Opp: Gandhi Bhavan, Nampally, Andhra Pradesh, Hyderabad .. Respondent THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN T.REV.C.No.269 OF 2010 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner – aerated water/cool drinks – company (Pesi, Slice and 7-UP etc.,) is a dealer on the rolls of the Commercial Tax Officer, Jubilee Hills Circle. The instant Tax Revision Case is filed by the petitioner under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (for brevity, the APGST Act) in relation to the assessment for 2001-2002. After hearing the counsel for the petitioner and the Special Counsel for the Department, the matter is being disposed of in limini for the reasons that ensue. Before doing so, we advert to the statement of facts. For the assessment year in question, the petitioner filed returns. But it did not include an amount of Rs.1,54,66,758/- on the allegation that they are container charges. Be it noted, according to the petitioner, all container charges include (i) transportation charges; (ii) cost of breakages; (iii) amount paid to workers for sorting out empty bottles; (iv) returns on investment in bottles and crates; and (v) interest on loans for acquiring marketing infrastructure. The Assessing Officer as well as the Appellate Deputy Commissioner did not accept the plea. They treated the amount towards container charges as forming part of the turnover and levied the tax. In the Second Appeal before the Sales Tax Appellate Tribunal (for brevity, the Tribunal), the petitioner relied on a Full Bench decision of the Tribunal in T.A.No.371 of 2003 dated 14.12.2005 wherein the returns on investment and interest on loans were held to be taxable and the other three components of container charges were held to be not includable in the turnover. The Tribunal, however, in T.A.No.559 of 2005 dated 09.12.2009 allowed the appeal in part on a different issue. Insofar as the petitioner’s plea of container charges are concerned, the same was negatived. In this Revision, the counsel for the petitioner relies on the agreement of distributorship, dated 01.09.1996, between the petitioner and the distributor and contends that the container charges are post sale payments made by the distributor, which cannot be included in the sales turnover. Per contra, the Special Counsel for the Department invites our attention to certain observations made in the impugned order by the Tribunal and contends that in the absence of any material before the Tribunal with regard to transportation charges, interest on investments and wages/salaries paid for sorting out etc., to the workers, the impugned order does not warrant any interference. We have gone through the agreements of distributorship. Clause 3 of agreement, dated 01.09.1996, reads as under: 3. METHOD OF SALES AND OTHER CHARGES: The Distributors shall deposit with the company a sum of Rs.1,000/- for due observance and performance of the terms and conditions of this agreement. The Distributor shall make an additional deposit for the number of bottles and crates supplied to him at rate/rates fixed by the company from time to time. The original deposit amount will be returned after the termination of the agreement and the additional deposit after the return of the bottles and crates supplied. The Distributor shall also bear the cost of interest on investment in containers supplied to him at rates mutually agreed upon from time to time. The Distributor shall maintain detailed record of his business activities in such a manner that the supplier can inspect, verify and take extracts from the same. In addition to the invoice value of goods, the Supplier reserves the right to collect monies for: (1) Transportation charges of empty bottles. (2) Wages/Salaries paid to workers/staff for sorting, cleaning, washing of empty bottles, which come in unsorted and dirty condition from the market. (3) Interest on investments made in bottles and crates. The charges for above shall be mutually worked out between the Supplier and the Distributor from time to time considering the market conditions and all other relevant factors. The submission of the petitioner that transportation charges, wages and interest on investment do not form part of the sale price and they are post sale payments by the distributor – on a plain reading of the Clause quoted above, is not without merit. We, however, hasten to add that the obligation and right flowing from the agreement and the proof in support of claiming the right or compelling the discharge of obligation are altogether different. The Tribunal observed that no such evidence was placed before it, while considering the appeal. In this background, it would be in the interests of justice to remand the matter to the Tribunal to consider the supporting material, if any, to justify the claim of the petitioner that the above three items forming part of container charges are not includable in the sale price. Further, when there is a decision of the Full Bench in T.A.No.371 of 2003, the same cannot be ignored by the Tribunal, if there is acceptable evidence in support of the claim. We give liberty to the petitioner and the Revenue to place all the necessary material to justify their respective claims. Accordingly, we set aside the impugned order of the Tribunal in T.A.No.559 of 2005 dated 09.12.2009. We remit the matter to the Sales Tax Appellate Tribunal, Hyderabad, with a request to dispose of the matter, as expeditiously as possible, preferably within a period of three months from the date of receipt of a copy of this order. The Tax Revision Case is, accordingly, allowed. There shall be no order as to costs. _____________ V.V.S. RAO, J ____________________________ RAMESH RANGANATHAN, J 29.10.2010 KH