Sale price and freight charges depend on contract terms; separate delivery charges may be excluded from taxable turnover.

Section 2(h) of the Central Sales Tax Act, 1956 treats sale price as the consideration for the sale and also sums charged for acts done by the dealer before delivery, but excludes freight or delivery charges where they are separately charged and not part of the consideration. Whether loading, freight, or delivery charges form part of taxable turnover depends on the true terms of the contract, including whether the sale is effectively f.o.r. destination or whether the amount is only a separate reimbursement. The inclusion of such charges in taxable turnover could not be upheld without fresh factual determination, and the matter was remanded to the assessing authority for redetermination.

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Issues: Whether loading and freight or delivery charges incurred before delivery to the common carrier form part of the sale price and taxable turnover under section 2(h) of the Central Sales Tax Act, 1956.

Analysis: Section 2(h) defines sale price in two parts. The first part covers the consideration payable for the sale, while the second part covers sums charged for anything done by the dealer in respect of the goods at or before delivery, subject to the exclusion for freight or delivery cost where separately charged. The decisive enquiry is the true nature of the contract and whether the freight or delivery element forms part of the sale consideration or is merely reimbursement of an amount payable by the purchaser. If the contract is in substance f.o.r. destination and the seller undertakes delivery at his expense, freight included in the price may enter the sale price. If, however, the freight or delivery charge is separately identifiable and does not form part of the consideration, the exclusion may apply. The assessment therefore required factual examination of the contract and the surrounding circumstances.

Conclusion: The inclusion of freight or delivery charges in the petitioner's taxable turnover could not be sustained without fresh factual determination, and the matter was remanded to the assessing authority for redetermination.

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