Freight charged separately from sale price is excluded from taxable turnover unless it forms part of consideration.

Freight and transport charges separately shown in the invoice are deductible from taxable turnover under the Tamil Nadu General Sales Tax framework when they are not part of the sale consideration. Rule 6(c) permits exclusion of freight and delivery charges if they are specified separately and not included in the goods' price. The decisive question is whether the contractual bargain or other material shows that freight formed part of the sale price; the invoice form alone is not conclusive. Where the goods price and freight are separately stated and no material shows freight as part of the sale, the Revenue cannot tax it as turnover.

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Issues: Whether transport charges or freight, when separately shown and not included in the sale price, can be included in the taxable turnover under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The statutory scheme makes tax chargeable on the taxable turnover, and rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959 allows deduction of freight and delivery charges when they are specified and charged separately without being included in the price of the goods sold. The decisive test is whether the freight forms part of the sale price; the form of the invoice by itself is not conclusive. Freight can be brought into turnover only where the contractual bargain or other material shows that it was part of the consideration for sale. Where the assessee separately shows the price of goods and the freight and there is no material to show that freight formed part of the sale price, the Revenue cannot tax it as turnover.

Conclusion: Transport charges separately realised and not forming part of the sale price are not includible in taxable turnover.

Final Conclusion: The revision failed because the State could not establish that the transportation charges were part of the price of the goods sold, and the Tribunal's exclusion of those charges was sustained.

Ratio Decidendi: Freight or transport charges are deductible from taxable turnover when they are separately charged and the sale contract does not make them part of the sale consideration.

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