Freight separately charged in cement invoices is deductible from turnover under rule 6(c), despite the Cement Control Order.

Freight charges separately specified and charged in invoices for cement despatched on a freight-to-pay basis are deductible from total turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, because such freight is treated as a billing item and not part of the sale price. The presence of the Cement Control Order, 1967 did not change the operation of rule 6(c) for the relevant assessment period. The stated principle is that freight qualifies for deduction where it is separately shown and not included in the price of the goods sold.

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Issues: Whether freight charges separately specified and charged in the invoices for despatch of cement to the customer's destination are deductible from the dealer's total turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, including for the period when the Cement Control Order, 1967 was in force.

Analysis: The dealer sold cement on a freight-to-pay basis and the freight was separately shown in the invoices. On those facts, the separation of freight was treated as a matter of billing and not as part of the price of the goods. Rule 6(c) permits deduction of amounts falling under freight when they are specified and charged separately, without being included in the price of the goods sold. The Court also held that the coming into force of the Cement Control Order did not alter the operation of rule 6(c) for the assessment period in question. The earlier decision dealing with the same rule and similar facts was followed.

Conclusion: The freight charges were deductible from the total turnover under rule 6(c) for both periods in question, and the assessee succeeded.

Ratio Decidendi: Where freight is separately specified and charged by the dealer and is not included in the price of the goods, it is deductible from taxable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, notwithstanding the operation of a control order affecting cement sales.

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