JUDGMENT

This appeal by special leave is directed against the judgment and order of the High Court of Allahabad allowing a revision petition filed by the Commissioner of Sales Tax, U.P. in the view that the amount paid by way of freight by the principals of the appellant-commission agent was liable to be included in the taxable turnover of the appellant.

The appellant, M/s. Vinod Coal Syndicate, is a commission agent in the coal business. In assessment proceedings under the U.P. Sales Tax Act, 1948, for the assessment year 1975-76, the appellant was assessed to sales tax on a taxable turnover of Rs. 6,16,629. This amount included the sums paid by the principals to the appellant for supplies of coal made directly by the suppliers. The assessing authority treated the sums paid on account of freight in respect of such supplies as sums includible in the taxable turnover of the appellant. The appellant proceeded in appeal against the assessment, and thereafter preferred a revision application against the dismissal of his appeal. The Additional Judge (Revisions) accepted the contention of the appellant and excluded the amount paid on account of freight from the taxable turnover of the appellant. The Commissioner of Sales Tax applied for in revision to the High Court, and as mentioned earlier, the revision petition was allowed.

It appears from the impugned judgment of the High Court that the only ground on which the High Court has held that the amount paid on account of freight by the principals should be included in the taxable turnover of the appellant is that the benefits of the relevant provision in explanation II to clause (i) of section 2 of the U.P. Sales Tax Act was not invoked by the appellant, and, therefore, it was not open to the appellant to take advantage of that clause in the explanation. Clause (i) of section 2 of the U.P. Sales Tax Act, defines the expression "turnover" as the aggregate amount for which goods are supplied or distributed by way of sale or sold, by a dealer, either directly or through another. Clause (i) of explanation II provides that "the amount for which goods are sold shall include 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 the cost of freight or delivery, or cost of installation or the amount realised as sales or purchase tax, when such cost or amount is separately charged". Plainly, the legislature intended that where the cost of freight was charged separately, that amount could not be included in the turnover of a dealer. That is what was done in this case. The freight was separately charged and was paid accordingly by the principals. The High Court erred in including the cost of freight in the taxable turnover of the appellant.

The appeal is allowed. The judgment and order of the High Court are set aside and the order of the Additional Judge (Revisions), Sales Tax, Varanasi, is restored. There will be no order as to costs.

Appeal allowed.