Appropriation of goods and freight charges: sale completes only on transfer of property, while delivery freight stayed in taxable turnover.

Appropriation of unascertained goods means only earmarking or identification and does not, by itself, complete a sale under the Tamil Nadu General Sales Tax Act, 1959 because transfer of property remains essential. It is relevant only for determining the situs of sale in cases involving unascertained or future goods, and does not fix the time of sale where property has not passed. Freight charges for transporting crude oil to the buyer's storage point were not deductible from taxable turnover under Rule 6(c)(i) because the seller remained obliged to deliver the goods there, and the freight formed part of the sale price.

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Issues: (i) whether appropriation of unascertained goods by itself completes a sale under the Tamil Nadu General Sales Tax Act, 1959; (ii) whether appropriation is relevant only for fixing the situs of sale and not the time of sale; and (iii) whether freight charges incurred for transporting crude oil to the buyer's storage point are deductible from taxable turnover under Rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959.

Issue (i): whether appropriation of unascertained goods by itself completes a sale under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Appropriation was held to mean only earmarking, setting apart, or identification of goods. It does not, by itself, amount to a completed sale unless there is transfer of property in the goods from seller to buyer for consideration. The statutory definition of sale requires transfer of property in goods, and mere appropriation cannot be treated as a substitute for that essential ingredient.

Conclusion: Appropriation by itself does not complete the sale.

Issue (ii): whether appropriation is relevant only for fixing the situs of sale and not the time of sale.

Analysis: The provisions analogous to Section 4 of the Central Sales Tax Act, 1956 and Explanation 3 to Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 were treated as relevant only for determining the place where a sale is deemed to take place in the case of unascertained or future goods. They do not dispense with transfer of property, and appropriation cannot be used to conclude that sale time also stands fixed merely because goods are identified. In the absence of transfer of property, situs becomes irrelevant because there is no completed sale.

Conclusion: Appropriation is relevant only for situs and not, by itself, for completion of sale or fixing the time of sale.

Issue (iii): whether freight charges incurred for transporting crude oil to the buyer's storage point are deductible from taxable turnover under Rule 6(c)(i) of the Tamil Nadu General Sales Tax Rules, 1959.

Analysis: Deduction of freight is available only when freight is separately charged and is not included in the price of the goods, and when it is shown to be post-sale expenditure. On the facts, the delivery and transfer of property were found to occur only at the buyer's storage point after measurement and removal of base sediment and water. The seller was under an obligation to transport the crude oil to that point, and there was no material to show that transport was undertaken merely as the buyer's agent after completion of sale. Ex-factory pricing and administrative instructions did not displace the statutory test, nor did they establish that freight was outside the sale price.

Conclusion: The freight charges were not deductible and formed part of the taxable turnover.

Final Conclusion: The challenge to the assessment failed because the transport charges were held to be part of the sale price, and the writ petitions were dismissed.

Ratio Decidendi: Freight incurred before the passing of property and in discharge of the seller's obligation to deliver goods to the buyer forms part of the sale price and taxable turnover, while appropriation of goods is relevant only for situs and does not by itself complete a sale.

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