TaxTMI 
TaxTMI 
2016 (11) TMI 841
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.... The answer to this question itself would turn upon the expression 'turnover' as defined under the U.P. Trade Tax 1948 which reads as under: - "2. (i) 'Turnover' means the aggregate amount for which goods are supplied or distributed by way of sale or are sold, by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration: Explanation I. ... Omitted... Explanation-II. - Subject to such conditions and restrictions, if any, as may be prescribed in this behalf: - (i) the amount for which goods are sold or purchased shall include the price of the packing material in which they are packed, and any ....
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.... by the dealer prior to the sale achieving completion would be liable to be included in the taxable turnover of the assessee. He submits that the expression "when separately charged" would not be determinative and that the terms of the sale would have to be looked into in order to answer the issue whether freight charges are liable to be included in the taxable turnover of the assessee. Both the learned counsels to buttress their rival submissions have placed reliance upon the judgment rendered by the Supreme Court in India Meters Limited Vs. State of Tamil Nadu (2010) 9 SCC 423. Their submissions have centered around what the Supreme Court observed in paragraphs 16, 17, 18 & 19 of the report and which for the sake of appreciation of the....
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.... to carry the goods from his place of manufacture to the place at which he is required under the contract to deliver, would thus become part of the amount for which the goods are sold by the seller to the buyer and would fall within the scope of "turnover". 19. The learned counsel for the State of Tamil Nadu submitted that freight and insurance charges are included in the sale price of the goods. Even if freight and insurance charges are shown separately in the Bill and added to the price of the goods, the character of payment would remain the same. Since freight and insurance charges represent expenditure incurred by the dealer in making the goods available to the purchaser at the place of sale, they would constitute an addition t....
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....e turnover would therefore have to be answered with reference to all expenses which a dealer does incur for effecting and completing the sale. This is evident from the use of the phrase 'at the time of or before the delivery thereof'. This would indicate that all expenses that the dealer incurs in order to complete the transaction of sale and before the transfer of property in the goods takes place are liable to be included in the taxable turnover. As one reads the judgment in India Meters Ltd (supra) it is clear that construing the provisions of the Tamil Nadu Act it was held that the expenses incurred by the seller on freight from his place of manufacture to the place at which he is required under the contract to deliver would be ....
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....turnover or not. For the purposes of determining the issue much would turn upon the terms of the contract as well as the intention of the contracting parties. As noted above, the issue would have to be answered bearing in mind the essential attributes and obligations of the bargain and the expenses which the seller is liable to incur in order to achieve and complete the transfer of property in goods. If the above basic principles are kept in mind and are applied to the facts of the case, it becomes apparent that freight was rightly included in the taxable turnover of the assessee. In the facts of the present case the Tribunal found that in terms of clause 10 of the contract, the supply was to be effected at the railway siding. In terms o....