TaxTMI 
TaxTMI 
1981 (3) TMI 229
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....asis and that the sale price included the freight but mistakenly omitted to include the turnover relating to freight in the taxable turnover, the assessing officer revised the turnover including a turnover of Rs. 99,964.25 which represented the freight value in the price. Having failed in the appeal before the Appellate Assistant Commissioner the assessee preferred a further appeal to the Tribunal. The Tribunal however held that the freight paid on the goods by the purchasing firm to the railway out of the amount payable as sale price does not form part of the sales turnover and on that ground allowed the appeal and deleted the addition made. It is against this order of the Tribunal, the State of Tamil Nadu have filed this revision petition....
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....ing firm. A sample form of invoice dated 4th March, 1962, may be quoted here: "To value of 29.1 tons of gypsum Rs. 1,696.82 Add increase in railway freight for 29.1 tons at Rs. 1.05 per M. ton Rs. 30.56 ------------ Rs. 1,727.38 Deduct railway freight 832.75 ------------ Balance Rs. 894.63 Add sales tax at 1 per cent Rs. 8.95 ------------ Rs. 903.58 Deduct advance received Rs. 620.00 ------------ Net amount due Rs. 283.58" ------------ The Tribunal thought that the agreement that the invoice could be raised with freight to pay and the deduction of the actual railway freight paid in the invoice showed that the freight did not form part of the price itself. In that view, the addition of Rs. 99,264.25 to the assessable turnover was ....
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....counsel for the assessee that the method of preparing the invoice as also the practice of sending the goods with freight to pay brings the present transaction within the exception mentioned in the last portion of the definition. We are of the view that neither the invoice prepared nor the tender and acceptance show that the freight was separately charged. As already stated, the freight is included in the price agreed to between the parties and the amount paid by way of freight is only deducted from the total price or value of the goods as in the case of advance received. The point need not detain us any further as an identical question came up for consideration before the Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [19....
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....d price to the purchaser, or he may obtain a railway receipt on the basis of 'freight to pay' and request the purchaser to pay the freight at the time of taking delivery of the goods from the railway at the destination railway station and give the purchaser credit for the amount of the freight against the agreed price. The latter would merely be a convenient mode of paying the agreed price. Since it is the obligation of the dealer to deliver the goods free on rail destination railway station, the dealer is liable to pay the freight as between him and the purchaser and the purchaser can very well refuse to accept the railway receipt which is not 'freight pre-paid' but 'freight to pay'. But he may, ordinarily as a reasonable businessman he wo....