1. These petitions raise a common point and have, therefore, been heard together. The question is whether what is described as lot cooly charges paid on a percentage basis by the customers to the different assessees form part of the turnover chargeable to sales tax. These charges were not included as being taxable in the initial assessments, but they were reopened and the charges, as forming part of the turnover, were subjected to tax. The typical reasoning of the revenue for doing so is that the amount was charged and paid at the time of sale 'along with the price of the goods' and so, it formed part of the turnover within the meaning of the definition of 'turnover'. An additional reason in support of that view was that lot cooly could not also fall within the scope of any of the items for which deduction was provided by Rule 6 of the Madras General Sales Tax Rules, 1959. Broadly, therefore, the view maintained by the revenue is that charges, which may well be described as pre-sale charges, should be treated as part of the consideration for a sale and the lot charges partook of that character.
2. The charges appear to be paid by the customers, no doubt, at the time of picking out or selecting timber from the depot. The usual practice, as mentioned by the petitioners, is that the customers, who go to the timber depots for purchase of specific varieties of timber and of particular measurements, take meticulous care in selecting good timber for specified purposes which would involve some labour like lifting up logs of timber, cutting them into sizes and placing them in one lot and so on and that for this purpose, according to the trade practice, certain charges were collected under the name of lot cooly charges. There is no dispute that at the time of making out sale bills these charges are shown separately in the bills and collected from the customers.
3. A reference to the definitions of 'sale' and 'turnover' as well as the charging section will show that it is the aggregate value paid as consideration for transfer of property in the goods sold that is brought to charge by applying the process of assessment including the provisions as to exemptions and deductions. The second limb in Explanation (2) to Section 2(r) of the Madras General Sales Tax Act, 1959, which defines 'turnover' reads:
Subject to such conditions and restrictions, if any, as may be prescribed in this behalf-(ii) the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of, or before the delivery thereof.
4. Strong reliance is placed on this provision for the revenue to justify the charge in respect of lot cooly charges. In our opinion, the Explanation cannot be read in the abstract. Its context is with reference to the sale and turnover as defined. It is now well settled that the expression 'sale of goods' in the State Legislative entry bears the same meaning and scope as it has been understood in the legislative practice of this country since the enactment of the Sale of Goods Act. The object of the Madras General Sales Tax Act is to levy a general tax on the sale or purchase of goods in the State. It is clear, therefore, that what could legitimately be brought to tax under the Act is the aggregation of the consideration for the transfer of property in the goods. Obviously, it should follow that service charges cannot be equated to consideration for transfer of property in the goods. In the Explanation referred to, if understood in the context, as it should be, 'any sums charged for anything done by the dealer in respect of the goods' can only relate to something done by the dealer in respect of the goods which involves transfer of property in the goods and for consideration. The further condition is that something should have been done in respect of the goods at the time of, or before the delivery of the goods. So what is chargeable to tax is not any sum charged at the time of or before the delivery of the goods, but any sum, charged for transfer of property in the goods, involved in anything done by the dealer in respect of the goods at the time specified by the Explanation. The Explanation read in the abstract is, of course, of wide scope and may possibly take in any sum charged for anything done by the dealer in respect of the goods whether or not it involved also transfer of property in the goods. But, as we said, the fact that it is an Explanation to the definition of 'turnover' and the 'turnover' is but the aggregate amount of the consideration of sales shows that it has to be read in the context and not de hors it. On that view with respect, we are unable to share the approach made in Sarju Pd. Pritam Lal v. Judge, Revisions, Sales Tax, U.P.1, to the problem.
5. The petitions are allowed. Learned Assistant Government Pleader says that the lot cooly charges had been made on a percentage basis and without reference to the actual labour charges paid with reference to the service rendered to each customer. That is not a matter which has been examined by the revenue. If the collection by way of lot cooly charges is in excess of the actual service charge incurred and paid by the assessee, we are not called upon in these petitions to express an opinion as to whether such excess can by any view of the matter, form part of the price. But we think that the revenue should have an opportunity to go into that question. It will, therefore, be at liberty to consider and dispose of the matter after notice to the assessees, and, if they so desire, hearing them. No costs.