Freight and delivery charges may be deductible when separately charged, and delivery to a carrier can support inter-State sale treatment.

Freight and delivery charges separately shown in sale bills were treated as deductible from sale price only to the extent of actual freight and incidental delivery expenses, and a remand was proper where the assessee had not been given a fair opportunity to prove the deductible component. On the inter-State question, goods delivered within Madhya Pradesh to a common carrier for onward movement outside the State were regarded, on the facts found, as having the necessary inter-State character. The discussion thus links deductibility of separately charged transport costs with verification of the actual claim, and treats delivery to a carrier for outside-State movement as capable of constituting an inter-State sale.

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Issues: (i) Whether freight and delivery charges separately shown in the sale bills were deductible under section 2(o) of the M.P. General Sales Tax Act, 1958, and whether the Tribunal was justified in remanding the matter for further inquiry. (ii) Whether the sale of goods valued at Rs. 1,80,000 supplied to M/s. R.R. Contractors, Indore, was an intra-State sale or a sale in the course of inter-State trade or commerce.

Issue (i): Whether freight and delivery charges separately shown in the sale bills were deductible under section 2(o) of the M.P. General Sales Tax Act, 1958, and whether the Tribunal was justified in remanding the matter for further inquiry.

Analysis: The statutory definition of sale price excludes the cost of freight or delivery when separately charged. The claim before the authorities included both actual freight paid to transport contractors and incidental expenses connected with loading, unloading, and delivery. Since the authorities had not afforded proper opportunity to establish the incidental component of the claim, the Tribunal was entitled to remand the matter for verification of the actual deductible expenses.

Conclusion: The remand on this issue was justified, and the question was answered in favour of the assessee and against the department.

Issue (ii): Whether the sale of goods valued at Rs. 1,80,000 supplied to M/s. R.R. Contractors, Indore, was an intra-State sale or a sale in the course of inter-State trade or commerce.

Analysis: The finding accepted by the Tribunal was that the goods were delivered to M/s. R.R. Contractors within Madhya Pradesh in their capacity as common carriers, and not merely as distributors. The goods were thereafter moved and sold outside Madhya Pradesh. On that factual basis, the transaction was treated as having the requisite inter-State character.

Conclusion: The sale of Rs. 1,80,000 was held to be a sale in the course of inter-State trade and commerce.

Final Conclusion: The reference was answered by sustaining the assessee's entitlement to deduction-related reconsideration and by treating the disputed turnover as inter-State, with no order as to costs.

Ratio Decidendi: Where freight and delivery charges are separately charged, only the actual deductible components may be excluded from sale price, and a remand is permissible if the assessee was not given a proper opportunity to prove the claim; a delivery to a common carrier for onward movement outside the State may amount to an inter-State sale on the established facts.

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