Hydrogenated oil is not oil within the meaning of R. 18 (2) of the Turnover and Assessment Rules.

( 1 ) REDDY, J. (1) This interpretation of Rr. 18 (2) and 5 (1) (g ). Turnover and Assessment Rules framed by the Government in exercise of the powers conferred by R. 3, Sub-rr. 4 and 5, Madras General Sales Tax Act is involved in this Revision Case. The dispute relates to the assessment year 1949-50. The petitioner is registered as a manufacturer under R. 18. The assessee-company purchase ground-nuts and converts them into oil both refined and hydrogenated. A deduction was claimed both under R. 18 (2) and R. 5 (1) (g ). The department declined to grant the deduction under both the heads on the ground that in the first case the oil sold by the petitioners was not the same commodity which was obtained by pressing the kernel and in regard to the second that the freight was not included in the price of the commodity as contemplated in R. 5 (1) (g ).

( 2 ) ON appeal, the Sales Tax Tribunal allowed the deduction in respect of refined oil but refused it with regard to the hydrogenated oil and freight charges. The Tribunal held that the hydrogenated oil otherwise called vanaspathi was not the same thing the oil obtained from crushing the groundnut and therefore fell outside the scope of the R. 18 (2 ). As regards the freight charge, it was decided that the benefit under R. 5 (1) (g) was not available to the petitioners at it was not shown as something different from the price of the goods sold

( 3 ) THE view of the Tribunal on both the matters is canvassed before us in this Revision case.

( 4 ) WE will first deal with the claim for deduction under R. 5 (1) (g ). Turnover and Assessment Rules, as it can be disposed of easily. The contention of Mr. Rajah Ayyar in this behalf is that deduction is allowable in the case of freight charges as they are shown as separate items in the bills.

( 5 ) IN order to appreciate this argument, it is necessary to refer to the relevant rule : " (5) (1) The tax or taxes under S. 3 or 5 or the notification or notifications under S. 6 (1) shall be levied on the net turnover of a dealer. In determining the net turn-over the amounts specified in cls. (a) to (k) shall, subject to the conditions specified therein, be deducted from gross turn-over of a dealer--- * * * * * (g) all amounts falling under the following two heads, when specified and charged for by the dealer separately, without including them in the price of the goods sold : (i) ireight. (ii) charges for packing and delivery and other such like services :

( 6 ) THE point for consideration is whether freight charges in this case are covered by cl. (g ). This rule requires that the freight should not be included in the price of the goods sold. In this case, undeniably, the petitioners have charged a price inclusive of the railway freight and then gave a deduction in respect of the railway freight. The effect of this rule is that is railway - freight which is payable by the buyer separately i. e. , independent of the sale consideration is paid by him into the bands of the seller who has undertaken to transport goods, it will not be regarded as aprt of the turn-over, though it is included in the bill, and would be a permissible deduction. If, on the other hand, the price stipulated for a commodity is inclusive of the freight on the understanding that the goods would be delivered at the place of the buyer free of freight, as seems to be the case here, it will form an integral part of the turn-over.

( 7 ) ON the admitted facts of this case, it is difficult to apply cl. (g) to this case. The fact that the petitioner has maintained a separate railway freight katha does not bring the case within the scope of that clause. Mr. Rajah Ayyar, the learned counsel for the petitioner, then submitted that the sums collected from the buyer constituted only gross turn-over and to arrive at the turn-over as defined in the Act the freight deducted out of the sale price should be excluded from it. We do not think this can be accepted. For one thing, it was not on this groun

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