Ramaswami Gounder, J.
1. This second appeal is filed by the State of Madras against the judgments and decrees of the Courts below decreeing a suit for a declaration that the assessment of sales tax under the head 'railway charges' or freight is illegal and for a refund of a sum of Rs. 52-15-3.
2. The plaintiff is a piece-goods merchant carrying on business in Tirunelveli. His business consisted in purchasing goods from Bombay and Ahmedabad and selling them in retail at Tirunelveli. For the year 1949-50, his gross turnover was nearly ten lakhs of rupees; but in respect of the turnover to the extent of Rs. 3,389-11-2 representing the railway charges or freight, he objected to the assessment, and it was in respect of that turnover that the suit for refund of the tax of Rs. 52-15-3 was filed.
3. The claim was made under rule 5(1)(g) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, which provides that the tax under Section 3 or the notification under Section 6 (1) shall be levied on the net turnover of a dealer and that in determining the net turnover, the amounts specified in clauses (a) to (l) of that rule shall, subject to the conditions specified therein, be deducted from the gross turnover of a dealer; and clause (g) mentions all amounts such as freight etc., when specified and charged for by the dealer separately, without including them in the price of the goods sold. The plaintiff when selling the goods to his customers prepared bills showing the price which he paid at Bombay and also the railway freight which he paid for getting the goods transported to Tirunelveli as a separate item. Therefore, his contention is that under clause (g), he is entitled to claim exemption for the freight so paid at Bombay because he charged it separately in the bills which he issued to his customers. But, it is clear that nothing turns upon the fact whether he showed the freight which he paid when he purchased the goods separately or as part of his sale price at Tirunelveli. It is true that for the purpose of fixing his sale price at Tirunelveli he has necessarily to include the freight which he paid for the purpose of getting the goods transported from Bombay to Tirunelveli, that is to say, the freight which he paid would become part of his sale price at Tirunelveli. But the question is whether clause (g) would apply to that freight, remembering that that freight was paid at the purchase point and had no relation to the sales which he effected at Tirunelveli.
4. Under the rule the plaintiff shall be levied only on the net turnover, and having regard to the fact that the plaintiff was a dealer in piece-goods, under rule (4), his turnover for the purpose of the rules shall be the amount for which the goods are sold by the dealer. The amount for which the goods are sold by the plaintiff would undoubtedly include the freight, because the freight which he paid goes into the sale price which he charges for the goods when he sells them to his customers at Tirunelveli. But what is important to remember is that in respect of the sales which he effects at Tirunelveli he does not pay any freight, and there being no question of freight in connection with sales effected by him, it is clear that he is not entitled to claim the exemption in regard to the freight which he paid for the purpose of his purchase though it is taken into account for fixing the cost price. In a case like this, we are concerned only with what happens at the sale point, where there was no freight at all.
5. In this view, the appeal is allowed, and the suit will stand dismissed, but, in the circumstances without costs in all the Courts. Leave to appeal is granted.