Separately charged freight may be excluded from turnover, but only if separate agreement and actual payment are proved.

Freight or delivery charges separately charged do not form part of turnover under the U.P. Trade Tax Act, but exclusion depends on proof that transportation consideration was separately agreed and actually paid. The contract here showed distinct supply and transportation components with separate rates, yet the decisive factual question remained whether the railway had in fact made separate payment for freight. The tribunal's order was set aside and the matter remanded for fresh adjudication, with an opportunity to adduce evidence on separate payment.

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Issues: Whether outward freight formed part of the assessee's turnover where the contract contained separate parts for supply of goods and transportation, and the freight was stated to be separately charged.

Analysis: Explanation II(i) of the U.P. Trade Tax Act excludes cost of freight or delivery where such cost is separately charged. The contract on record indicated two distinct parts, one for supply of ballast and the other for transportation, with separate rates. In such a situation, the decisive question was whether the amounts mentioned in the two parts were in fact separately paid by the railway, because only then could the freight be excluded from turnover.

Conclusion: The matter required reconsideration by the tribunal on the factual issue of separate payment, and the impugned order was set aside with a remand.

Final Conclusion: The dispute on inclusion of freight in turnover was not finally determined on merits and was sent back for fresh adjudication after giving the assessee an opportunity to adduce evidence.

Ratio Decidendi: Where freight or delivery charges are separately charged under the governing sales tax definition, they do not form part of turnover; however, this exclusion depends on proof that the transportation consideration was separately agreed and actually paid.

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