Railway freight and taxable turnover: freight included in sale price cannot be excluded from sales tax turnover.

Railway freight formed part of taxable turnover where the sale contract treated the price as inclusive of freight and the freight was not separately charged from the price of the goods. Under the Andhra Pradesh General Sales Tax Act, 1957, turnover includes the total consideration for the sale, and the freight deduction under rule 6(1)(g) applies only when freight is separately specified and charged. The agreement clauses, invoice, and course of dealing showed that the purchaser's freight payment was made on behalf of the dealer, so no statutory exclusion was available. Accordingly, the freight was correctly included in turnover.

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Issues: Whether railway freight payable by the purchaser under the contract formed part of the seller's turnover for sales tax purposes.

Analysis: Turnover under section 2(s) of the Andhra Pradesh General Sales Tax Act, 1957 covers the total amount charged as consideration for the sale, while rule 6(1)(g) permits exclusion of freight only when it is separately specified and charged without being included in the price of the goods sold. On a construction of clauses (4) and (16) of the agreement, the price was treated as inclusive of freight in sales made free on rail destination, and the purchaser's payment of freight was regarded as payment on behalf of the dealer. The invoice and the course of dealing supported that the freight was not separately charged so as to attract the statutory deduction.

Conclusion: Railway freight was rightly included in the turnover and the assessee was not entitled to exclude it from the taxable turnover.

Final Conclusion: The tax revision succeeded for the Revenue and the challenge to inclusion of railway freight in turnover failed.

Ratio Decidendi: Freight forms part of taxable turnover when, under the contract, it is included in the sale price and is not separately charged as freight distinct from the price of the goods.

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