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TMI Blog2019 (12) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... operty of goods at the door steps of the buyer, all pre-sale expenses incurred by the selling dealer will be part of the sale price or taxable turnover. The deduction under Rule 6(c) of the TNGST Rules cannot be claimed by the selling Dealer, contrary to the specific terms of the F.O.R. Destination contract. Once the terms of the contract clearly specified, the contract of sale was F.O.R. Destination , the bifurcation of total sale price in two or three parts, as has been done in the present case like price for Gypsum, freight charges and loading and stacking charges will not be material, insofar as the question of determination of the taxable turnover is concerned. It is trite law that the Rule cannot go beyond the four corners of the main statutory provisions. The definition of taxable turnover does not make any such exclusions and it is clear that all pre-sale expenditure incurred by the seller/dealer are part of sale price including the freight as in the present case will fall under taxable turnover. The learned Sales Tax Tribunal as well as the Assessing Authority were justified in upholding the imposition of the tax on such part of the freight charges on the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egatived by the Madras High Court. The following observations in this decision are quite relevant. 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 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 . As the freight charge incurred here was a charge which the seller was required to incur prior to the completion of the sale it constituted a part of the pre-sale expense and was, therefore, rightly includable in the taxable turnover. Thus, in the present cases before us also, as the transfer of property in gypsum took place at the buyer's place after weighment and testing, we have no hesitation in holding the freight charges included in the sale price so as to bring the turnover as taxable turnover is quite in order and there is no case to interfere with the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Division Bench decision of the Madras High Court in India Meters Ltd v. State of Tamil Nadu, [2010] 34 VST 273 (SC) . 5.He further submitted that Rule 6(c) of the TNGST Rules which provides for deductions from the taxable turnover, is subject to the conditions specified in the said Rules. Drawing the attention to the said Rule 6(c), which was relied upon by the learned counsel for the Assessee, he submitted that under Rule 6(c), all amounts falling under the special heads when specified and charged for by the dealer separately, 'without including them in the price of the goods', only are deductible. The said special three heads are the special heads of 6(c), which include freight as well as the charges for delivery. He therefore submitted that the condition of these charges being not included in the price of goods is not satisfied in the present case, because the goods are admittedly sold only F.O.R. Destination and the contract of sale is completed after the receipt of goods at the business place of the buyer and therefore, in such cases, mere mention of freight charges separately in the Purchase Order by the buyer company will not entitle the sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 . 14. The decision of this Court, in the case of S. Vadivel Mudaliar and Sons v. State of Tamil Nadu [1983] 52 STC 189, merely examined the words in Rule 6(c), without considering the effect of the definitions of turnover and sale and also without referring to the decisions of the apex Court in the case of Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1969] 24 STC 487 and Dyer Meakin Breweries Ltd. v. State of Kerala [1970] 26 STC 248. The decision of the apex Court in Hindustan Sugar Mills Ltd. v. State of R ajasthan [ 1979 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... 18. 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) . 19. Sale is defined in Section 2(n), inter alia, as meaning every transfer of the property in goods (other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of business for cash, deferred payment or other valuable 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 sol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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