Freight charges added to sale price were held part of assessable turnover when not incidental to the sale.

Freight charges incurred in transporting goods from the place of manufacture to the dealer's business premises were held not deductible under Rule 6(4)(f)(i) of the Mysore Sales Tax Rules, 1957, because they were not shown to be incidental to the sales and no delivery arrangement at the factory was established; the deduction was therefore disallowed. Those freight amounts, having been recovered from customers and included in the total sale price, were also treated as part of the consideration and assessable turnover, and could not be excluded merely by describing them as freight.

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Issues: (i) Whether freight charges incurred in transporting goods from the place of manufacture to the dealer's place of business were exempt from sales tax under Rule 6(4)(f)(i) of the Mysore Sales Tax Rules, 1957. (ii) Whether such freight charges formed part of the consideration and assessable turnover liable to sales tax.

Issue (i): Whether freight charges incurred in transporting goods from the place of manufacture to the dealer's place of business were exempt from sales tax under Rule 6(4)(f)(i) of the Mysore Sales Tax Rules, 1957.

Analysis: The earlier view that inward freight charges were deductible under the rule was held to be no longer good law in light of the later Supreme Court decisions. Freight charges incurred for bringing goods from the manufacturer to the dealer's place of business were not shown to be incidental to the sales made to customers, and no material established any delivery option at the factory or any instance of delivery there. Charges unconnected with the sale could not be deducted from taxable turnover.

Conclusion: The freight charges were not exempt under Rule 6(4)(f)(i) and deduction was rightly disallowed.

Issue (ii): Whether such freight charges formed part of the consideration and assessable turnover liable to sales tax.

Analysis: Turnover includes the aggregate amount for which goods are sold for valuable consideration. Since the freight amount recovered from customers was included in the total amount charged and no legal basis for deduction was established, the amount could not be excluded from assessable turnover merely by describing it as freight.

Conclusion: The freight charges formed part of the consideration and assessable turnover liable to sales tax.

Final Conclusion: The petition was liable to fail because the freight charges were not deductible and remained assessable as part of the turnover.

Ratio Decidendi: Freight charges incurred in moving goods from the place of manufacture to the dealer's place of business are deductible from taxable turnover only if they are shown to be incidental to the sale and otherwise permitted by the governing rules; charges unconnected with the sale form part of the assessable turnover.

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