Controlled commodity pricing: freight formed part of sale consideration under the statutory f.o.r. scheme and was taxable turnover.

Where a statutory control order fixes an f.o.r. destination price for a controlled commodity, the producer must realise that controlled price and freight borne under the scheme forms part of the sale consideration. The Cement Control Order, 1967 overrode any contractual label treating delivery as complete on loading or shifting freight to the purchaser, because the statutory scheme required the producer to account for the price fixed by law. The separately charged freight exclusion did not apply where the amount was embedded in the controlled price itself. Railway freight on cement was therefore includible in taxable turnover under the Rajasthan Sales Tax Act, 1954 and the Central Sales Tax Act, 1956.

---

---

Issues: Whether railway freight on cement sold under the Cement Control Order, 1967, formed part of the sale price and was includible in taxable turnover under the Rajasthan Sales Tax Act, 1954 and the Central Sales Tax Act, 1956.

Analysis: The price fixed under the Control Order was an f.o.r. destination price and the statutory scheme required the producer to realise that price and account for the excess in the Cement Regulation Account. The Control Order therefore overrode any contrary contractual stipulation that delivery was complete on loading and that freight was payable by the purchaser. On that footing, the freight was part of the consideration payable for the sale and could not be excluded as separately charged freight. The exclusion relating to separately charged freight did not apply because the amount was part of the price itself.

Conclusion: The railway freight formed part of the sale price and was includible in the assessee's taxable turnover, against the assessee and in favour of the Revenue.

Ratio Decidendi: Where a statutory control order fixes an f.o.r. destination price for a controlled commodity and the scheme shows that freight is borne by the producer as part of that controlled price, the freight forms part of the sale consideration and is liable to be included in turnover notwithstanding contrary contractual labels.

---