Freight and octroi excluded from coal sale price where title passed at loading point and charges were borne by retailers.

Under the Colliery Control Order, coal was sold at fixed prices and title passed at the loading point, so freight and octroi did not form part of the dealer's sale consideration. The dealer neither received nor paid those amounts, and the retailers took physical delivery and bore the charges. As the control order did not treat freight as an element of sale price, and the transaction was distinguishable from cases where freight was part of the bargain, the Delhi HC held that freight and octroi were not includible in the sale price for sales tax purposes.

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Issues: Whether freight and octroi charges were includible in the sale price of coal for the purpose of levy of sales tax on the dealer.

Analysis: The coal was sold under the Colliery Control Order on fixed prices, and the contractual and statutory scheme showed that title passed at the loading point. The dealer did not receive any amount towards freight or octroi, nor did it pay those amounts to the railway authorities. The retailers took physical delivery and bore those charges. In these circumstances, the freight and octroi were not part of the consideration for the dealer's sale. The control order did not treat freight as an element of sale price, and the transaction was distinguishable from cases where freight formed part of the bargain between seller and buyer.

Conclusion: Freight and octroi charges were not includible in the sale price, and sales tax was not payable on those amounts.

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