F.O.R. destination freight is part of taxable turnover when sale completes only on delivery to the buyer.

Under an F.O.R. destination contract, where property in the goods passes only on delivery at the buyer's premises, freight incurred by the seller to complete that delivery is part of the sale price and taxable turnover under the Tamil Nadu General Sales Tax Act. Rule 6(c) could not be used to exclude that amount because it cannot reduce the statutory definition of turnover, and contractual splitting of consideration into price, freight, and loading charges did not change the true character of the transaction. Freight charges were therefore rightly included in taxable turnover.

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Issues: Whether freight charges incurred under an F.O.R. destination contract form part of the taxable turnover under the Tamil Nadu General Sales Tax Act, 1959, notwithstanding a separate stipulation of freight and delivery charges in the purchase order and the deduction clause in Rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959.

Analysis: The contract provided for delivery and transfer of property in the goods at the buyer's premises, so the seller's freight obligation arose before completion of the sale. The governing statutory scheme defines turnover by reference to the amount for which goods are sold, and Rule 6(c) cannot be applied in a manner that cuts down that definition where the sale itself is completed only on delivery at the buyer's place. Binding precedent had already held that in an F.O.R. destination contract, freight incurred to carry goods to the place of delivery is part of the sale price and therefore part of turnover. A mere bifurcation of the total consideration into price, freight, and loading charges does not alter the true character of the transaction.

Conclusion: Freight charges were rightly included in the taxable turnover, and the assessee was not entitled to exclude them under Rule 6(c).

Ratio Decidendi: Where a sale under an F.O.R. destination contract is completed only on delivery at the buyer's premises, freight incurred by the seller to effect that delivery is a pre-sale expense forming part of the sale price and taxable turnover, and contractual bifurcation does not create a deduction not permitted by the statute.

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