Freight charges included in taxable turnover where delivery and transport formed part of the seller's contractual obligation.

Freight charges recovered from the purchaser are includible in taxable turnover under the U.P. Trade Tax Act where the contract shows that transport and delivery formed part of the seller's obligation. Separate billing of freight is not decisive; the controlling question is whether the goods were to be delivered as part of the bargain before sale was complete. On the facts noted, supply was to be effected at the railway siding, ownership remained with the contractor during transit, and the sale was completed only after transport and measurement at the siding, so the freight was rightly included.

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Issues: Whether freight charges recovered from the purchaser were includible in the taxable turnover under the U.P. Trade Tax Act, 1948.

Analysis: Section 2(i) of the Act defines turnover to include the aggregate amount for which goods are sold, and Explanation II(i) includes sums charged for anything done by the dealer in respect of the goods at the time of or before delivery, while excluding freight or delivery charges only where the contractual setting shows that such charges are truly separate from the seller's obligation to complete the sale. The decisive factor is not merely whether freight is shown separately in the invoice, but whether the contract required the seller to transport the goods and deliver them as part of the bargain. On the facts found by the Tribunal, supply was to be effected at the railway siding, ownership remained with the contractor during transit, and the sale was not complete until transport and measurement at the siding.

Conclusion: Freight charges were rightly included in the taxable turnover, and the issue was decided against the assessee and in favour of the revenue.

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