TaxTMI 
TaxTMI 
2001 (11) TMI 979
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....alue of each consignment together with full excise duty and sales tax will be made in Central payment, Madras, immediately on receipt of certified copies of acknowledgment of delivery challans from the chief store keepers of the systems concerned, subject to purchase order terms". 3.. It is clear from these clauses in the contract that the transfer of title to the goods was to take place only on delivery to the customer at the customer's place and that the customer's obligation to pay would arise after the delivery had been so effected. 4.. The contract also provided in the clause dealing with price that it was payable per unit ex-factory. It provided for the payment of excise duty and statutory levies, in addition to such ex-factory pric....
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....appeal against that order having succeeded, a further appeal was preferred by the Revenue, which came to be allowed by the Tamil Nadu Taxation Special Tribunal. The assessee is now before us questioning the correctness of that order of the Tribunal. 6.. The assessee claims that since the contract separately mentions the ex-factory price and the insurance and freight charges, and, under rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, the freight when specified and charged for by the dealer separately, without including the same in the price of the goods sold, is to be deducted from the turnover of the dealer, and that, therefore, the freight charged here could not have been treated as part of the sale price and subjected to tax. ....
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........" 8.. In this case, the obligation to pay the freight is clearly on the petitioner as there is no sale at all, unless the goods are delivered at the premises of the buyer and in order to so deliver, the assessee necessarily had to incur freight charges. The transfer of title to the goods as provided in clause (10) read with clause (6) of the agreement was to be at the place of delivery in the premises of the buyer. Though the contract mentioned the price of the meters as ex-factory price, the delivery was not at the factory gate. The specification of what the price would be at the factory gate, therefore, does not in the context of term, subject to which the sale was agreed to be effected, render it the point or the location at which t....
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.... brought for any individual customer. All the expenditure incurred is prior to the sale and was evidently a component of the price for which the goods were sold". The court, therefore, held that the expenditure incurred by the assessee in bringing the goods to Ernakulam formed part of the pre-sale expenditure, and could not be excluded while determining the taxable turnover of the assessee. 10.. Both these cases emphasise the fact that expenses incurred by a seller on freight would be part of the sale price, as until the transfer of title to the goods takes place that being the only mode in which sale could have taken place prior to the introduction of clause (29A) in article 366 of the Constitution there would be no sale. 11.. Learned co....
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....luable consideration...". The definition goes on to include a number of other transactions also within that definition of "sale". The turnover of an assessee/dealer would include the aggregate amount for which goods are bought or sold. It is, therefore, the amount for which the goods are bought or sold, which form part of the turnover and a thing can be said to be sold only when the transaction falls within the scope of the definition of "sale". 13.. When the transfer of the property or the goods is to be at the place of the buyer to which the seller is under an obligation to transport the goods, the expenditure incurred by the seller on freight in order to carry the goods from his place of manufacture to the place at which he is required ....