Separately charged freight is deductible from taxable turnover when the contract shows no intention to postpone transfer of property.

Freight or transportation charges separately specified and charged in a sales contract are deductible from taxable turnover under rule 9(f) when they are not included in the sale price. The Kerala HC held that the contract's split consideration, including distinct loading, transport and delivery charges, satisfied that condition. It also held that section 22 of the Sale of Goods Act did not postpone passing of property, because the contract showed no different intention and the weighing of timber at the factory was only for quantity and price verification. The deduction was therefore allowed and the assessment had to exclude the freight component.

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Issues: Whether freight or transportation charges separately specified and charged in the contract could be deducted from taxable turnover under rule 9(f) of the Kerala General Sales Tax Rules, 1963, and whether section 22 of the Sale of Goods Act postponed passing of property so as to disallow the deduction.

Analysis: The contract split the consideration into separate components, including a distinct amount for loading, transport and delivery. The statutory condition for deduction under rule 9(f) was that freight or delivery charges must be separately specified and charged without being included in the price of the goods sold. The terms of the bargain showed that the recording of weight at the factory site was only for cross-checking quantity and price, and did not indicate an intention to postpone the passing of property until that stage. Section 19(3) makes the rules in sections 20 to 24 applicable only unless a different intention appears, and on the contract terms no such postponement was found. The plea that the place of contract or the later weighing of timber defeated the deduction was rejected, as those circumstances were held to be irrelevant where freight had been separately shown and charged.

Conclusion: The freight or transportation charges were deductible and section 22 of the Sale of Goods Act did not apply to deny the deduction; the revision petitions failed.

Final Conclusion: The assessment turnover had to exclude the separately charged freight component, and the Tribunal's allowance of the deduction was sustained.

Ratio Decidendi: Where freight or delivery charges are separately specified and charged without being included in the sale price, they are deductible from taxable turnover, and the passing of property is determined by the contract's apparent intention rather than by the mere place of weighing or delivery.

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