The main legal point established in the judgment is the interpretation of section 2(i) of the U.P. Trade Tax Act, 1948, specifically regarding the exclusion of freight charges from the total turnover.

The applicant is a public limited company incorporated under the Indian Companies Act having its registered office at Modinagar, which carries on business of manufacture and sales of sugar, vanaspati, soap, paints, steel gases, distillery, lantern and electrodes, etc. The assessing authority has assessed the company on its total turnover of Rs. 39,67,00,030 only and the company has effected the said turnover and submitted that the distribution charges should be excluded from the total turnover. The authorities below have rejected claim of the applicants company and in that view of the matter, the said question has been raised by the applicant through the revision application before this Court. In order to appreciate the argument of Sri Bharat Ji Agrawal, appearing for the applicant, I set out section 2 (i) of the U. P. Trade Tax Act, 1948 along with explanation II (i) which reads as under :

" 2 (i) turnover means the aggregate amount for which goods are supplied or distributed by way of sale or are sold by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration.

Explanation II.- Subject to such conditions and restrictions, if any, as may be prescribed in this behalf, -

(i) the amount for which goods are sold or purchased shall include the price of the packing material in which they are packed, and 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 cost of freight or delivery or cost of installation or the amount realised as trade tax on sale or purchase of goods, when such cost or amount is separately charged. "

2. It appears that while taking taxable turnover of Rs. 39,67,00,030, the respondents have also included freight, loading, unloading, insurance charges and also charges relating to maintenance charges of the depot amount to Rs. 59,33,371. The applicant has submitted that the said amount of Rs. 59,33,371 cannot be included in the total turnover and the same should be excluded and the assessment should be made on the basis of the balance turnover. Counsel for the applicant has further submitted that the explanation II to section 2 (i) of the Act is unambiguous relating to cost of freight or delivery or cost of installation having been excluded while computing the total turnover. I have considered the order passed by the Tribunal also the submission made by Sri Bharat Ji Agrawal and find that the cost of freight or delivery or cost of installation charges have been specifically mentioned in section 2 (i) of the Act, which makes it clear that the cost of freight or delivery or cost of installation charges should be excluded from amount of sales or purchases. In that view of the matter, I hold that freight charges on account of loading and unloading should be excluded from the total turnover if such amount has been charged by a separate billing. The other charges claimed on account of insurance or maintenance of depot or forwarding charges shall be included while computing the total turnover. In this connection I refer to a decision of the honourable Supreme Court reported in [1989] 73 STC 317; 1988 UPTC 218 (Vinod Coal Syndicate v. Commissioner of Sales Tax, U. P. , Lucknow) and also decision of this Court reported in 1987 UPTC 1628 (Shyam Engineering Works v. Commissioner of Sales Tax) I hold that the aforesaid two decisions are applicable in this case and further hold that the cost of freight or delivery or cost of installation charges should be excluded from the total turnover. In that view of the matter, the order passed by the Tribunal as well as authorities below are modified to this extent as observed above. The assessing authorities are directed to pass an appropriate order.

In the result, the revision application is partly allowed. There shall be no order as to costs.

Application allowed in part.

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