Freight paid before sale forms part of taxable turnover despite separate invoicing

Freight incurred by the seller to move goods from Ahmedabad to Agra before sale formed part of the taxable turnover under the U.P. Trade Tax Act. The separate invoicing of freight was not decisive because the statutory test looked to the substance of the transaction, and the charge was part of the seller's cost of bringing the goods to the place of sale. The exclusion for freight applied only to amounts charged for and on behalf of the purchaser after sale, not to pre-sale transport expenses built into the price structure. Freight was therefore includible in sale price and not deductible from taxable turnover.

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Issues: Whether freight charged separately for transport of goods from Ahmedabad to Agra formed part of the taxable turnover under section 2(i) of the U.P. Trade Tax Act, 1948, and was therefore includible in the sale price.

Analysis: The goods were sold from the assessee's place of business at Agra after they were received from Ahmedabad. The freight from Ahmedabad to Agra was incurred to bring the goods to the place where they were sold and was the obligation of the assessee or its principal, not of the buyer. The separate mention of freight in the invoice was not decisive; the substance of the transaction controlled. Under the statutory definition of turnover, the aggregate amount for which the goods were supplied included the freight incurred before sale to make the goods available for sale at Agra. The exclusion for freight applied only to charges incurred for and on behalf of the purchaser after the sale, not to freight that was part of the seller's cost of bringing the goods to the place of sale.

Conclusion: Freight from Ahmedabad to Agra was part of the turnover and sale price and was not deductible from taxable turnover. The finding was against the assessee and in favour of the Revenue.

Ratio Decidendi: Freight paid by the seller to transport goods to the place of sale, being a pre-sale expense and part of the price structure, forms part of taxable turnover notwithstanding separate billing.

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