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TMI Blog2016 (11) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... ion stood imposed to the effect that in a case of the stone ballast being found within 60 days from the date of deposit as not being as per the quality prescribed the same would be liable to be removed by the supplying contractor. As the Tribunal records on the basis of the terms of the contract, the contract of sale was not complete till the ballast was transported to and measured at the railway siding. It records that the responsibility and ownership of the ballast while in transit remained with the assessee. There was thus no transfer of property in goods at the time of they being put into transit. The freight charges were therefore charges which clearly came to be incurred by the revisionist in order to complete the bargain and a charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount for which goods are sold or purchased shall include the price of the packing material in which they are packed, and any sums charged for anything done by the dealer in respect of the goods sold, at the time of or before the delivery thereof, other than, cost of freight or delivery or cost of installation or the amount realized as trade tax on sale or purchase of goods, when such cost or amount is separately charged; (ii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; and (iii) where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d what the Supreme Court observed in paragraphs 16, 17, 18 19 of the report and which for the sake of appreciation of the controversy is extracted hereinbelow: - 16. It is no doubt true that Rule 6(c) of the Rules permits deduction of the cost on freight while determining the taxable turnover. However, that provision must be read in the context of definition of turnover as also the definition of sale in Sections 2(r) and 2(n) respectively of the Act. Turnover is defined in the Act, inter alia, to mean the aggregate amount for which goods are bought or sold or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n) . 17. Sale is defined in Section 2(n), inter alia, as meaning ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the goods available to the purchaser at the place of sale, they would constitute an addition to the cost of the goods to the dealer and would clearly be a component of the price to the purchaser. The amount of freight and insurance charges would be payable by the purchaser not under any statutory or other liability but as part of the consideration for the sale of the goods and would therefore, form part of the sale price. Section 2 (i) of the 1948 Act defines 'turnover' to mean the aggregate amount for which goods are supplied or distributed by way of sale or are sold. Explanation II while delineating the various items which are liable to be included or excluded while computing taxable turnover in clause (i) provides th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m his place of manufacture to the place at which he is required under the contract to deliver would be liable to be treated as falling within the scope of the expression ''turnover'. The mere fact, the Supreme Court held, that the charges are shown separately would not detract from the above position if it is found that there was an obligation on the dealer to make the goods available at the place of sale. The latter part of sub clause (i) which employs the words when such cost or amount is separately charged is dealing with and is liable to be restricted to those class of transactions where the obligation to transport the goods to the place of the purchaser is not an essential facet of the transaction of sale. It must nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of clause 10 of the contract, the supply was to be effected at the railway siding. In terms of clause 11, the responsibility and ownership of the stone ballast remained that of the supplying contractor. In terms of clause of 12 of the contract, the measurement of stone ballast was to be carried out and effected at the railway siding. A further condition stood imposed to the effect that in a case of the stone ballast being found within 60 days from the date of deposit as not being as per the quality prescribed the same would be liable to be removed by the supplying contractor. As the Tribunal records on the basis of the terms of the contract, the contract of sale was not complete till the ballast was transported to and measured at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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