Freight and delivery charges were held inseparable from sale consideration where invoice bifurcation did not prove a true deduction.

Separately shown freight, insurance and handling charges were not deductible from taxable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, because the commercial arrangement showed that delivery of gas cylinders to the buyers' premises and return of empty cylinders formed part of the sale. Although the invoices split the price into gas value and freight-related charges, the charges were not independent of the sale consideration and were effectively part of an inclusive price. Mere bifurcation in the invoice did not satisfy the statutory condition for deduction, so the disputed turnover remained assessable.

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Issues: Whether freight, insurance and handling charges shown separately in the invoices were excludible from the taxable turnover under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, when the contract and surrounding circumstances showed delivery of gas cylinders at the buyers' premises and return of empty cylinders as part of the arrangement.

Analysis: Rule 6(c) permits deduction of freight and delivery charges only when they are specified and charged separately without being included in the price of the goods sold. The arrangement in question showed an ex-works description in the invoices, but the actual commercial understanding required delivery of cylinders to the customers' site and retrieval of empty cylinders. The charges collected were not treated as independent and unrelated to the sale price, and mere bifurcation of the invoice into gas value and freight charges did not alter the character of the consideration. The Court relied on the distinction between a truly separate freight charge and a split-up of an inclusive sale price, and held that the facts did not satisfy the statutory condition for deduction.

Conclusion: The freight and incidental charges formed part of the sale consideration and were not deductible from the taxable turnover; the assessee was not entitled to exclusion of the separately billed amounts.

Final Conclusion: The assessment including the disputed turnover was upheld and the appeal failed.

Ratio Decidendi: Under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, separately stated freight or delivery charges are deductible only when they are not included in the price of the goods sold; a mere split-up of an inclusive sale price does not entitle the dealer to exclusion.

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