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TMI Blog1982 (3) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... eing the expenses incurred by them towards freight and loading charges for transporting the goods from Erode to Madras. The Commercial Tax Officer took the view that the freight and loading charges incurred by the assessee were only pre-sale expenses and therefore could not be deducted from the total taxable turnover. On appeal by the assessee, the Appellate Assistant Commissioner, Pollachi, allowed the appeal and held that it was a permissible deduction. Thereafter, the matter was taken before the Board of Revenue. The Board of Revenue by its order dated 6th June, 1977, set aside the order of the Appellate Assistant Commissioner and held that the deletion of Rs. 98,816.18 relating to freight charges was not correct. Hence this tax case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax. Loading charges of Rs. 20 per lorry will also be extra to your account." Packing is to be in lorries to be arranged by the assessee. M/s. Shaw Wallace Company Limited have confirmed the above contract on the terms set out above. On 11th February, 1967, a contract has been entered into where the price has been mentioned as under: "Rs. 47 per baram of 500 Ibs. (1 ton-157 cft.) ex-tannery, Rs. 1.13 per cft. will be extra towards lorry freight. This is inclusive of sales tax. Loading charges of Rs. 20 per lorry load will also be extra to your account." Packing in lorries is to be arranged by the assessee. It is not disputed that for subsequent years also, the contracts between the parties were on the above lines. From this it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale consideration, if really there was only one single consideration. There cannot be any room for doubt so far as the facts of this case are concerned that for all practical purposes, the parties agreed that the price should be fixed at a particular rate per baram, ex-tannery and that the freight charges and loading charges should be charged for separately. It is not a case of there being a single consideration for the sale of one baram of fleshings. On the facts of the case, we have no hesitation in holding that rule 6(c) of the Tamil Nadu General Sales Tax Rules is attracted. Further, the case is governed by the ratio laid down by us in Balakrishna Brick Works v. State of Tamil Nadu [1982] 49 STC 251 (T.C. No. 778 of 1977, dated 22nd Oct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook to transport the goods and to deliver the same or where the expenditure was incurred as an incident of sale, and that it was not intended to exclude from the taxable turnover any component of the price, expenditure incurred by the dealer which he had to incur before sale and to make the goods available to the intending customer at the place of sale. This interpretation of the Supreme Court, if we may say so with respect, is consistent with the factual situation in that case. As already stated, liquor was being transported from the assessee's various factories to its warehouse at Ernakulam. At the time of transport, there was no intention on the part of the assessee to sell the liquor that has been transported to any particular customer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the railway freight and would therefore be outside the terms of rule 5(1)(g) which required that in order to enable a dealer to claim the deduction it should be charged for separately and not included in the price of goods sold. This case is also distinguishable on its facts in view of the fact that the assessee therein had shown the aggregate price for the entire quantity of goods sold and deducted therefrom the actual railway freight incurred by them. But, in this case, as we have already stated, the contract itself stipulated that the freight should be calculated at Rs. 1.13 per cft. [(T.C. Nos. 31 to 37 of 1979, etc., High Court, Madras, dated 23rd December, 1981). Ramco Cement Distribution Co. (P.) Ltd., Rajapalayam v. State of Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rabad Asbestos Cement Products Ltd. v. State of A.P. [1969] 24 STC 487 (SC), the Bench held that the amount of freight was not includible in the total turnover of the assessee as the freight did not form part of the price payable for the sale. The facts in this case are similar to the facts in Hyderabad Asbestos Cement Products Ltd. v. State of A.P. [1969] 24 STC 487 (SC). We therefore hold that the order of the Board of Revenue holding that the sum of Rs. 98,816.18 incurred by the assessee towards freight and loading charges was not permissible deduction, has to be set aside. The assessee will be entitled to deduct the said amount from the total taxable turnover. We accordingly set aside the order of the Board of Revenue and restore that o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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