Controlled sale price includes freight where statutory pricing fixes destination price and blocks separate deduction claims.

Where a statutory cement control scheme fixed a uniform free on rail destination price, freight formed part of the controlled sale price and was includible in taxable turnover. Contractual clauses, invoices and covering letters that merely arranged reimbursement or credited freight did not convert it into a separate post-sale charge, because private documentation could not override the statutory pricing structure. The amount described as freight was also not a discount, as it remained part of the pricing and reimbursement mechanism. Accordingly, deduction of freight under the sales tax rules was unavailable and the freight turnover remained taxable.

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Issues: (i) Whether freight charges formed part of the sale price and were includible in the taxable turnover under the Cement Control Order, 1967. (ii) Whether the contractual terms, invoice and covering letter showed a separate post-sale freight liability on the purchaser so as to permit deduction of freight under the sales tax rules. (iii) Whether the amount described as freight could be treated as a discount or otherwise excluded from turnover.

Issue (i): Whether freight charges formed part of the sale price and were includible in the taxable turnover under the Cement Control Order, 1967.

Analysis: The price fixed under clause 8 of the Cement Control Order was a uniform free on rail destination price, and clause 9 required the producer to remit the excess over the retention price to the Cement Regulation Account while reimbursing actual freight incurred by the producer. The scheme showed that freight was embedded in the controlled destination price and that the producer, not the purchaser, bore the freight burden for purposes of the statutory pricing structure. The controlled price could not be split by private arrangement so as to convert freight into an amount outside the sale price.

Conclusion: Freight charges were includible in the taxable turnover and could not be excluded on the footing that they were outside the sale price.

Issue (ii): Whether the contractual terms, invoice and covering letter showed a separate post-sale freight liability on the purchaser so as to permit deduction of freight under the sales tax rules.

Analysis: Clauses 5 and 10 dealt only with delivery and transit risk, and did not alter the statutory price structure. Clause 14 merely required the buyer to pay freight in the first instance and enabled credit in the bill, which was read as machinery to implement reimbursement under clause 9 rather than as an agreement for an ex factory sale. The invoice and covering letter separately mentioning freight were treated as accounting devices for reimbursement, not as proof that freight was charged independently of the controlled destination price. Rule 6(c) permitted deduction only where freight was specified and charged separately without being included in the price, which was not the position on the facts found.

Conclusion: The contractual documents did not establish a separate deductible freight charge, and deduction under the sales tax rules was not available.

Issue (iii): Whether the amount described as freight could be treated as a discount or otherwise excluded from turnover.

Analysis: The amount was not a discount but part of the pricing and reimbursement mechanism under the Control Order. The assessee collected the full controlled price and merely gave credit for freight in the invoice, which did not alter the character of the amount for turnover purposes. The reliance on cases involving voluntary pricing arrangements was distinguished because the statutory control order fixed the destination price and left no scope for contractual variation of the freight component.

Conclusion: The freight amount was not a discount and could not be excluded from the taxable turnover on that basis.

Final Conclusion: The disputed freight turnover was part of the taxable sale price under the statutory cement pricing scheme, and the revision by the Revenue succeeded.

Ratio Decidendi: Where a statutory control order fixes a uniform free on rail destination price and makes freight part of the controlled pricing mechanism, private contractual or invoicing arrangements cannot recharacterize freight as a separate post-sale item deductible from taxable turnover.

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