Separate freight and trade tax charges excluded from turnover where bills show distinct realisation

Freight charges and trade tax separately charged in bills do not form part of turnover under the U.P. Trade Tax Act when the record shows they were realised distinctly from the sale price. The court relied on the bills and supporting certificate as the best evidence of separate charging and rejected any presumption that those amounts were included in the sale price. In the absence of documentary basis for an inclusive arrangement, the assessing authority could not add the separately charged freight and trade tax to taxable turnover. The assessee was therefore entitled to exclusion of those amounts from turnover.

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Issues: Whether freight charges and trade tax, when separately charged in the bills, form part of turnover under section 2(i), Explanation II(i) of the U.P. Trade Tax Act, 1948.

Analysis: The statutory definition of turnover excludes freight or delivery charges and the amount realised as trade tax when such amounts are separately charged. The decisive question was whether the dealer had separately charged and realised these amounts, which had to be determined from the bills and other reliable material on record. The separate bills and supporting certificate showed that the goods price, freight, and trade tax were charged distinctly, and no documentary basis existed for the presumption that the charges were inclusive in the sale price. The assessing authority could not disregard the best evidence on record and include the separately charged amounts in turnover on a hypothetical assumption of an inclusive arrangement.

Conclusion: Freight charges and trade tax separately charged and separately realised were not includible in turnover, and the assessee was entitled to exemption on those amounts.

Ratio Decidendi: Amounts expressly and separately charged towards freight or trade tax do not form part of turnover under the statutory definition and cannot be added to taxable turnover in the absence of a finding that they were included in the sale price.

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