LIABILITY DECLINED

New Zealand Herald, Volume LXXI, Issue 21807, 23 May 1934, Page 9

LIABILITY DECLINED

SALES TAX ON PURCHASE CLOTH FOR UNIFORMS . BOARD AND CONTRACTORS A request to accept responsibility for tho payment of sales tax on material supplied for tho making of uniforms was refused by the Auckland Transport Board yesterday. Tho Wellington Woollen Manufacturing Company, Limited, which made the request, said it was the successful tenderer in September, 1932, for the supply of 1000 yards of dark navy vicuna and 1200 yards of dark navy serge. Before all tho materials had been delivered the sales tax came into force, and that was borno by the board until the contract was completed. The company said it had also boon awarded a similar contract in December, 1933, and had assumed that the same conditions would operate. Tho firm explained it was not aware that the Act had been amended. An invoice, with sales tax added, was sent to the board, but when payment was made a month later a note was added by the board, "Contract note not plus sales tax." In the circumstances the board was asked to accept responsibility for the sales tax, which the firm was or-ly collecting on behalf of the Government. The secretary, Sir. W. St. J. Clarke, reported that the Act provided for tho tax to bo the responsibility of the purchaser of tho goods if the contract was entered into before February 9, 1933, but made no similar provision regarding agreements entered "into after that date.

Tho chairman, Mr. J. A. 0. Allum, moved that the firm be advised that the board was not able to meet its wishes.

Mr. N. Bartram said it was hard on the firm to make it boar the cost of a technical error. They should bo Kiven the benefit of the doubt. The Chairman: We can do so if members will contribute the amount themselves. It is unfortunate, but we are bound by the terms of the contract and cannot vary them. It was decided to inform the company that the board had no legal right to make a variation in the tender, under which it would assume liability for the payment of sales tax.