Hire-purchase turnover includes composite instalment price where interest and service charges are inseparable from sale consideration.

In hire-purchase transactions, a composite instalment price fixed under the agreement was treated as the taxable sale consideration, because the assessee failed to show any separable deduction for interest, service charges, or depreciation. The court also rejected exemption on the footing of sales in the course of import, since the goods were imported under the assessee's own import licence and there was no privity of contract with the foreign seller. The assessments were upheld for the relevant years, while the later years covered by the notification dated 10 October 1974 were remitted for fresh computation under that notification.

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Issues: Whether, in hire-purchase transactions, the taxable turnover included the full instalment amount, including interest and service charges, and whether the assessee was entitled to exclusion on the footing that the transactions were sales in the course of import.

Analysis: The claim for exemption on the ground that the transactions were sales in the course of import was rejected because the assessee had imported the goods under its own import licence and there was no privity of contract between the buyer and the foreign seller. On the turnover question, the authorities found that the price of the goods had already been fixed under the hire-purchase arrangement and was payable only by instalments. The assessee did not establish any basis for deduction of depreciation, nor did it show that interest and service charges were separable from the agreed sale consideration. The total amount recoverable under the agreement was treated as the composite sale price, and the entire hire-purchase amount was held to form part of the taxable turnover. For the later assessment years covered by the notification dated 10 October 1974, the matter was remitted for fresh computation on the footing of that notification.

Conclusion: The assessee was not entitled to exclude interest and service charges from the taxable turnover, and the full instalment amount under the hire-purchase agreements was correctly taken as sale price. The assessment was upheld for the relevant years, and the remand for the later years was also sustained.

Final Conclusion: The tax cases failed overall, with the assessments substantially sustained and only the limited remand direction for fresh computation in the notified years remaining undisturbed.

Ratio Decidendi: Where a hire-purchase agreement fixes a composite price payable in instalments and the assessee fails to prove any separable deduction, the entire agreed amount, including interest and service charges, forms part of the taxable sale consideration.

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