Freight separately recovered from buyers does not form part of sale price when charged apart from the invoice.

Freight charges separately recovered from buyers did not form part of the sale price where the Rajasthan Sales-tax Act, 1954 and the Central Sales-tax Act, 1956 excluded freight or delivery cost separately charged. The record showed freight was not included in bills or vouchers, but was recovered separately through debit notes and transport documents. On that basis, reimbursement of freight payable by the purchaser was outside the sale consideration, so the assessment, penalty and interest based on including freight in sale price could not be sustained.

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Issues: Whether freight charges separately recovered from buyers formed part of the sale price for the purpose of assessment under the sales tax laws.

Analysis: The definitions of sale price in the Rajasthan Sales-tax Act, 1954 and the Central Sales-tax Act, 1956 exclude the cost of freight or delivery where such cost is separately charged. The material on record showed that freight was not included in the bills and vouchers, but was recovered separately by debit notes and transport documents. The contractual conditions relied upon below did not answer the real question whether freight was a component of the sale consideration, and the governing principle was that reimbursement of freight payable by the purchaser does not form part of sale price.

Conclusion: The freight charges did not form part of the sale price and the assessment, penalty and interest based on their inclusion could not be sustained.

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