The main legal point established in the judgment is the interpretation of 'turnover' and 'purchase price' under the Karnataka Sales Tax Act in relation to the inclusion of transportation charges, supported by a relevant observation from a Supreme Court case.

RAJASEKHARA MURTHY, J.

( 1 ) THIS revision arises out of the order of the Tribunal dated 22nd November, 1978, passed in s. T. A. No. 821 of 1976.

( 2 ) THE petitioner-company manufactures synthetic fibres. For the purpose of such manufacture, the company purchases firewood in large quantities from several suppliers in South Kanara district and elsewhere. The company has a purchase depot at Mangalore and other places. For the assessment year 1973-74, the petitioner claimed a deduction in a sum of Rs. 1,25,808. 08 from the total turnover, as transportation charges paid to the sellers of firewood. The Commercial Tax Officer, Mangalore, treated this item as part of the price of the firewood and included it in the taxable turnover. In the appeal preferred against the assessment, the Deputy Commissioner of Commercial Taxes (Appeals), Mangalore, upheld the assessment and dismissed the appeal. In further appeal before the Appellate Tribunal, the Tribunal deleted the turnover in dispute and directed the assessing officer to modify the assessment. Being aggrieved by the said order, the State has filed this revision petition.

( 3 ) THE assessee purchased firewood from the five suppliers and paid different amounts to the sellers towards transportation charges. The assessing officer, on a scrutiny of the bills and documents produced by the assessee, held that the assessee was not entitled to deduction of the said sums from the turnover, since the transportation charges paid by the assessee were part of the price paid for the firewood supplied. The contention of the assessee before the assessing officer was that the transportation charges were separately charged by the sellers and therefore, the same do not form part of the purchase price. The assessing officer's finding is that the firewood was delivered at the depots owned by the assessee at different places and therefore, the purchases price of the firewood was inclusive of the transport charges.

( 4 ) THE Tribunal, while disagreeing with the finding given by the assessing officer, took the view that the transport charges were incurred by the sellers as incidental or subsequent to the sale. It appears, the Tribunal has looked into the terms of the agreement between the parties. We do not have the benefit of that agreement nor a cop of the agreement is on record. We may, however, proceed on the basis of the finding recorded by the Tribunal. The Tribunal has observed that there is a stipulation in the agreement for delivering the firewood at the assessee's depot. The tribunal, however, has stated that that by itself is no ground to infer that the sale was completed only upon such delivery. The Tribunal has stated :

". . . . . . . . . If that were the stipulation between the appellant and the sellers, the terms about the supply of firewood from the places of felling trees and the term for payment of transportation charges separately would not have found mention in the agreement of purchase. We are convinced that the transportation of firewood from the forest to the appellant's depot was incidental or subsequent to the sale and that the cost incurred for transport was not meant to be included in the price of the goods purchased by the appellant. The deduction claimed by the appellant is justly allowable. "

( 5 ) MR. Rajendra Babu, the learned counsel for the State, is very critical about the findings recorded by the Tribunal. He urged that eve though freight charges are separately shown in the bills, the purchaser is not entitled to that deduction since he has to part with that amount also to the seller for getting the goods at the depot. The learned counsel also relied upon the definition of the word "turnover" in support of his contention. The definition of "turnover" under section 2 (1) (v) of the Karnataka Sales Tax Act reads :

" (v) 'turnover' means the aggregate amount for which goods are bought or sold, or supplied or distributed by a dealer, either directly or through another, on

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