Freight forms part of taxable turnover when included in an indivisible sale price absent express contractual exclusion.

Where freight is included in an indivisible sale price and no express contractual term shifts that cost to the purchaser, it forms part of turnover under the Central Sales Tax Act. Deduction is available only when freight is separately charged or expressly excluded by contract. Applying the principle in Tungabhadra Industries Ltd. and distinguishing Hyderabad Asbestos Cement Products Ltd., the court held that the freight amount could not be deducted and remained includible in taxable turnover.

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Issues: Whether the cost of railway freight could be excluded from turnover and kept outside the taxable sale price under the Central Sales Tax Act.

Analysis: Section 2(j) defines turnover as the aggregate of the sale prices received and receivable, and section 2(h) defines sale price as the amount payable as consideration for the sale, while excluding freight only where such cost is separately charged. On the facts found, the assessee's bills treated the freight as part of an indivisible sale consideration and there was no finding of any contractual term requiring the purchaser to bear freight. The case was held to be covered by the principle applied in Tungabhadra Industries Ltd., while the reliance on Hyderabad Asbestos Cement Products Ltd. was rejected as distinguishable because that case turned on an express contractual stipulation.

Conclusion: The freight amount could not be deducted from the sale consideration and was includible in turnover for sales tax purposes.

Ratio Decidendi: Freight is deductible from taxable sale price only when it is separately charged or is excluded by an express contractual condition; where the bill shows an indivisible price inclusive of freight and no such contract is proved, the freight forms part of turnover.

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