Taxable turnover and export exemption: pre-delivery granite charges were includible, and penultimate-sale relief failed for lack of proof.

Charges collected for transport, handling, dressing and polishing of granite stones before delivery were held to form part of taxable turnover because they were incurred to put the goods in a deliverable state and were collected as part of a lump-sum sale consideration. The claim for exemption as a penultimate sale in the course of export under section 5(3) of the Central Sales Tax Act failed because the assessee did not prove the required statutory link between its sales and the actual export, including reliable evidence that the goods sold were the goods exported. The revisions were therefore rejected and the assessments left undisturbed.

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Issues: (i) Whether the charges collected towards transport, handling, dressing and polishing of granite stones before delivery formed part of the taxable turnover under section 2(h) of the Central Sales Tax Act, 1956. (ii) Whether the assessee was entitled to exemption under section 5(3) of the Central Sales Tax Act, 1956 on the footing that the sales were penultimate sales in the course of export.

Issue (i): Whether the charges collected towards transport, handling, dressing and polishing of granite stones before delivery formed part of the taxable turnover under section 2(h) of the Central Sales Tax Act, 1956.

Analysis: The purchase orders and surrounding correspondence showed that the operations of transport, handling, dressing and polishing were required to be carried out before delivery and were undertaken under the agreed terms with the exporters. The evidence also showed that these amounts were collected along with the sale consideration as a lump sum for making the goods deliverable. Charges incurred for putting the goods in a deliverable state and charged as part of the sale transaction fall within the inclusive definition of sale price under section 2(h). The reasoning was consistent with the principle that freight and allied charges which form part of the price charged to the purchaser are includible in turnover.

Conclusion: The charges for transport, handling, dressing and polishing were correctly included in the taxable turnover, and the issue is against the assessee.

Issue (ii): Whether the assessee was entitled to exemption under section 5(3) of the Central Sales Tax Act, 1956 on the footing that the sales were penultimate sales in the course of export.

Analysis: The claimed exemption required proof that the sales to the exporters were made for the purpose of complying with a pre-existing export order and that the very goods sold were exported. The materials placed before the authorities did not satisfactorily establish this link. In the absence of reliable proof, including the necessary statutory evidence to connect the assessee's sales with the subsequent export, the conditions for exemption under section 5(3) were not met. The assessee therefore failed to establish that the sales qualified as penultimate sales in the course of export.

Conclusion: The claim for exemption under section 5(3) was rightly rejected, and the issue is against the assessee.

Final Conclusion: The revisions failed on both the turnover inclusion question and the export exemption question, and the assessments were left undisturbed.

Ratio Decidendi: Charges collected as part of a lump-sum amount for services required to make goods deliverable before transfer form part of taxable turnover, and exemption for penultimate sales in the course of export is available only on proof of the statutory link between the sale and the actual export.

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