Freight paid directly by purchasers is excluded from taxable turnover when it is not charged in the sale bill.

Freight did not form part of the dealer's taxable turnover where the sale bills showed only ex-colliery price, taxes and handling charges, and freight was neither charged by the dealer nor paid to it. Inclusion in turnover was justified only if freight formed part of the sale bill or was treated as part of the sale consideration. Authorities dealing with dealer-incurred expenditure were distinguished because, on the undisputed facts, the purchasers bore freight directly. Notices and consequential orders under Section 21 were therefore unsustainable.

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Issues: Whether freight could be included in the taxable turnover of the petitioners while proceeding under Section 21 of the U. P. Sales Tax Act, 1948, when the freight was not charged by the petitioners in the sale bill and was paid directly by the allottees.

Analysis: The factual position that the petitioners raised bills only for ex-colliery price, taxes and handling charges, and that freight was neither paid to them nor charged by them from the allottees, was undisputed. On those facts, freight did not form part of the petitioners' turnover. The inclusion of freight in taxable turnover could arise only if it formed part of the sale bill or was charged by the dealer as part of the sale consideration. The authorities relied on by the revenue were distinguished because they concerned expenditure incurred by the dealer as part of the price structure, whereas here the freight was borne directly by the purchasers. The principle recognised in the cited Supreme Court decision was that freight separately charged, and not included in the bill of sale price, cannot be brought into the turnover of the dealer.

Conclusion: Freight could not be included in the taxable turnover of the petitioners, and the notices and consequential orders under Section 21 were unsustainable.

Ratio Decidendi: Freight not charged by the dealer in the sale bill and paid directly by the purchaser does not form part of the dealer's taxable turnover under the sales tax law.

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