Separate transport charges are deductible, while second-sale exemption depends on whether earlier sales were taxable sales.

Transport charges separately shown in the bills were deductible from turnover because they reflected an independent bargain for carriage and not part of the goods' sale price, satisfying rule 6(c)(i). The second-hand lorry sale could not be treated as exempt on a second-sale basis merely because the vehicle had changed hands several times in the State; exemption also depended on whether earlier sales were taxable sales by dealers in the course of business. The present sale was taxable in the assessee's hands, but the taxability of earlier sales remained unresolved and required fresh consideration.

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Issues: (i) Whether the assessee was entitled to claim exemption from tax on the sale of the second-hand lorry on the footing that it was a second sale in the State and whether the matter required further investigation as to the taxability of earlier sales; (ii) Whether transport charges separately shown in the bills were deductible from turnover.

Issue (i): Whether the assessee was entitled to claim exemption from tax on the sale of the second-hand lorry on the footing that it was a second sale in the State and whether the matter required further investigation as to the taxability of earlier sales.

Analysis: The assessee established that the lorry had changed hands several times in the State and was at least the fourth owner. That was sufficient to show that the sale was not the first sale in the State. However, exemption on the ground of second sale depended not merely on the number of transfers, but also on whether the earlier sales were taxable sales. The Tribunal had not examined whether the earlier owners were dealers or whether their sales were effected in the course of business so as to attract tax. Since the assessee's sale of the lorry arose from an incidental activity connected with her business, the present sale was taxable in her hands, but the status of the earlier sales remained unresolved.

Conclusion: The question of liability on the first item was not finally determined and was remitted for fresh consideration.

Issue (ii): Whether transport charges separately shown in the bills were deductible from turnover.

Analysis: The transport charges were shown separately from the price of the bricks. The earlier decision relied on by the revenue was confined to its own facts, where the original bargain showed a consolidated price and the separate billing did not reflect the true agreement. On the facts here, the arrangement fell within the principle that where there are distinct bargains, one for supply of goods and another for transport at the customer's option, the transport charges do not form part of the sale price. The requirements of rule 6(c)(i) were therefore satisfied.

Conclusion: The assessee was entitled to deduction of the transport charges.

Final Conclusion: The revision succeeded on the transport-charges issue, while the lorry-sale issue was sent back for reconsideration, leaving the turnover dispute only partly concluded.

Ratio Decidendi: A separate charge for transport is deductible when it represents an independent bargain and is not part of the price of the goods, and exemption on second-sale grounds cannot be granted without examining whether the earlier sales were taxable sales.

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