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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether freight and other transport-related charges, though separately shown in the bills, were deductible from the taxable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959.
Analysis: Separate disclosure of freight in the invoice did not by itself establish that the amount was outside the sale price. Deduction was available only where the freight was shown to have been incurred for and on behalf of the purchaser, or where the bargain between the parties clearly excluded it from the price. On the facts, the goods were sold on a delivered basis at the Madras Port, the bills did not correlate the charges with actual freight for each consignment, and the amount described as freight also covered other unspecified charges. The charges were therefore treated as pre-sale expenses incurred by the dealer and not as amounts incidental to the sale. The reasoning was consistent with the principle applied in the analogous Supreme Court decision dealing with similar freight and handling charges.
Conclusion: The freight and other charges were not deductible from the taxable turnover and were includible in the sale price; the finding was against the assessee and in favour of the Revenue.
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