Taxable turnover includes pre-sale freight and insurance charges when they form part of sale consideration, despite separate billing.

Under the Karnataka sales tax law, freight and insurance charges incurred before sale and forming part of the consideration payable by the purchaser were held includible in taxable turnover, because the deduction rule permits exclusion only of freight separately specified and charged without being included in the price of the goods. The earlier local decision allowing deduction of separately shown freight and insurance was treated as no longer good law in light of later Supreme Court rulings, which rejected deduction merely because such charges were separately billed in the invoice or debit note.

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Issues: Whether the earlier decision allowing deduction of separately shown freight and insurance charges from turnover under the Karnataka sales tax law had been impliedly overruled by later Supreme Court decisions, and whether such charges, when incurred before sale and forming part of the consideration received from the purchaser, are includible in taxable turnover.

Analysis: The governing provisions defined sale, total turnover and taxable turnover broadly, while the deduction rule permitted exclusion only of freight specified and charged separately without including it in the price of the goods sold. The Court contrasted the earlier local decision with the later Supreme Court rulings, which held that freight and similar charges incurred before sale, or forming part of the sale consideration, are not deductible merely because they are shown separately in the invoice or debit note. The Court also relied on the later reaffirmation of that principle by the Supreme Court and held that the earlier local ruling could no longer be treated as good law.

Conclusion: The question was answered in the affirmative. The earlier decision was impliedly overruled, and freight and insurance charges of the kind in issue were held includible in taxable turnover.

Final Conclusion: The legal position was settled against exclusion of pre-sale freight and allied charges from turnover where those amounts form part of the price payable by the purchaser, notwithstanding separate billing.

Ratio Decidendi: Amounts incurred before sale, or forming part of the consideration for the sale, are includible in taxable turnover and cannot be deducted merely because they are separately charged as freight or allied expenses.

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