Railway freight paid by the purchaser is includible in the turnover of the seller for the purpose of calculating sales tax if it is included in the price charged for the goods.

JAGANMOHAN REDDY, C. J.

( 1 ) THIS tax revision case and the other writ petitions involve the determination of the question whether the order of the majority of the sales Tax Appellate Tribunal, declaring that railway freight payable by the purchaser shall not be included in the turnover of the seller, is correct. Two members of the sales Tax Appellate Tribunal, on a reading of section 2 (s) of the Andhra Pradesh general Sales Tax Act, 1957 (here in after referred to as "the Act") and rule 6 of the Rules framed thereunder, have held that the railway freight paid by the purchaser cannot be included in the turnover of the sales made by the company. The Accounts member, on the other hand, thought that because the company was charging the list price which included the railway freight and as such the goods were to be f. o. r. destination as per clauses 4 and 16 of the agreement, the railway freight was properly included in the turnover.

( 2 ) MR. Srinivasamurthy, learned Advocate for the respondent-company, who are also the petitioners in the writ petitions, contends that under the terms of the agreement, the price at which the goods produced by the company were supplied to the stockists was the current general gross list price f. o. r. less such discount as may be be fixed by the company from time to time, that the railway freightrwas payable by the stockists and since the contract does not make it obligatory for the company to pay the railway freight, the railway freight paid by the stockists cannot be said to have been paid on behalf of the company to justify the Sales Tax authorities to include the railway freight in the turnover of the company. The company, according to the learned Advocate, followed this procedure because they wanted to have a uniform price throughout India for the sale of their products and in order to enable the stockists to do so, it allowed, apart from the stockists discount a further deduction of railway freight and charged only the net amount after such deductions as the price of the goods sold to the stockists. The price so charged, he submits, constitutes the turnover and there is no justification for adding to it the freight paid by the stockists. Mr. Ramachandra Reddy, learned Government Pleader, on the other hand avers that the argument on behalf of the company itself admits that the gross list price includes the freight, and what is in fact to be paid by the dealer is asked to be paid by the stokist on their behalf in which case the railway freight was properly included in the turnover of the dealer.

( 3 ) THE validity of these rival contentions depends upon the terms of the contract entered into between the parties. But before examining them, it is necessary to set out the provisions, so far as they are relevant for our purposes, dealing with turnover and how it is computed for purposes of assessment under the Act. "section 2 (s)- turnover means, the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing or value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer ,whatever, be that description, the name or object thereof; provided. . . . . . . . . . . . . . . . . . . . . . "rule 6 (1 ).-"the tax or taxes under sections 5, 6 or notified under section 9 (1) shall be levied on the net turnover of a dealer. In determining the r,et turnover,. the amounts, specified in clauses (a) to (f) shall, subject to the considerations specified therein, be deducted from the total turnover of a dealer- (a) to (f ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) all amounts falling under the following two heads, when specified and charged for by the dealer separately, without including them

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