Freight in sale consideration: reassessment addition failed where books showed consolidated pricing and no suppression was proved.

Freight may form part of cement sale consideration, but on these facts the Department failed to prove suppression or non-disclosure of freight receipts. The assessee's accounts showed consolidated sale prices including freight, and the comparisons drawn from invoices and depot transfers were not reliable to establish escapement. Section 12A of the Tamil Nadu General Sales Tax Act, 1959 was aimed at abnormally low prices used to evade tax, but the books here were not rejected and the assessments rested on those books. The freight addition in reassessment was therefore unsustainable, and the reassessment orders could not be upheld.

---

---

Issues: Whether freight formed part of the sale consideration for cement sales and whether the addition made towards freight under the reassessment could be sustained.

Analysis: The assessment and the remand proceedings did not examine the matter in the manner directed earlier. The accounts produced before the assessing authority contained the sale price as well as freight charges, and there was no material showing suppression or non-disclosure of freight receipts. The attempted comparisons between different invoices and depot transfer transactions were not reliable to establish suppression. Freight outward, as a matter of law, can form part of sale consideration, but on the facts the Department failed to dislodge the assessee's case that the consolidated price already included freight. Section 12A of the Tamil Nadu General Sales Tax Act, 1959 was intended to address abnormally low prices shown with a view to evasion, but the books here were not rejected and the assessments were based on those books.

Conclusion: The addition towards freight was unsustainable and the reassessment orders could not be upheld.

---