V. Ramaswami, J.
1. These two tax cases relate to the assessment years 1962-63 and 1963-64 and raise a common question as to the taxability of certain transport charges. The respondent-assessee claimed that these freight charges have been separately charged for in their bills and, therefore, could not be included in the taxable turnover under Rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959. But the assessing officer held with reference to the bills produced that the amounts claimed as deduction are pre-sale charges and therefore part of the price itself and liable to be included in the taxable turnover. This order was confirmed by the Appellate Assistant Commissioner. On the ground that the bills produced show the transport charges separately, the Tribunal allowed the appeal and had deducted the amount from the taxable turnover. The revenue has filed these revision petitions.
2. All the transactions in dispute were entered into between the respondent-assessee and one Messrs. K.P.V. Sheik Mohamed Rowther and Company, Madras-1. The respondents sold the goods as agents of Bengal Coal Company Limited. The sale took place in Madras and the bills produced by the respondent-assessee show that the goods are to be delivered at the moorings or the quay in the Madras Port. By way of illustration we may extract a typical bill, viz.:
---------------------------------------------------------------------3. For the following goodssupplied to : Rate AmountM.V. 'Jalapratap' of 5-11-62at East Quay Rs. nP. Per Rs. NP.----------------------------------------------------------------------Tonnes Particulars 28.252 metric tonnes. High Volatile Selected 'A' Grade Steam Coal Metricfrom Dishergarh/Poniati tonne Steam. 26.74 2,529.01(F.O.R. Colliery)Madras Sales Tax @Steamer and railwayfreight and other 2.00 100 50.58charges73.04 M. Tonnes 7,176.33Encl: Ship's Receipt No. 250 on 9-11-63 (in duplicate). 9,755.92Bills for customs harbour overtime fees and also hire of orcrane, if any, will be sent to you direct by them Total 9,755.90Rupees nine thousand seven hundred and fifty-five, nayapaise ninety only.F.O.R./Stock/Madras/Delivery at your place sent by For Parry and Co. Ltd.goods/passenger/freight to pay paid at CR/RR Local.R.R. PWB/Lorry Receipt to. (Sd.)
4. In one of the bills, the words 'F.O.R./Stock/Madras/Delivery at your place' are struck off and they are put as 'T.I.B. Madras'. In that bill, the words 'sent by, etc.' have also been scored. On the basis that freights have been separately charged in the bill, the respondent-assessee claimed that the amount is not includible in the taxable turnover. We are unable to agree with the order of the Tribunal that merely because the freight is shown separately in the bill, the dealer is entitled to deduct that amount from the taxable turnover. In order to claim deduction, not only the freight will have to be shown and separately charged in the bill, but there should be evidence to show it was not included in the price in the bargain made between the dealer and the purchaser. If the bargain between the parties was for payment at a particular price, the mere fact that the dealer had bifurcated the price and shown the total amount under separate headings will not enable the dealer to get the deduction of the freight from the total taxable turnover. Though there is no written contract produced in this case, we could infer an agreement to deliver the goods at the moorings or quay in the Madras Port. The purchaser was not concerned as to from where the goods are supplied. The bills also do not show how the freight is charged and from where the goods were supplied. The bills show only charges at a uniform rate of Rs. 73.04 per metric tonne and it is not related to the actual freight paid with reference to the consignment. Further, the charges include not only freight but other charges which are not specified. We are, therefore, of the view that the freight and other charges included in the bill are towards pre-sale expenses incurred by the dealer and not incidental to the sale itself.
5. The Supreme Court, in a similar case, Dyer Meakin Breweries Ltd. v. State of Kerala : (1970)3SCC253 ., with reference to rule 9(f) of the Kerala General Sales Tax Rules, 1963, which is in pari materia with Rule 6(c) of the Tamil Nadu General Sales Tax Rules, 1959, held that under that rule only those charges which are incurred expressly or by necessary implication for and on behalf of the purchaser are after the sale when the dealer undertakes to transport goods and to deliver the same or where the expenditure is incurred as an incident of sale. In that case also, a company which manufactured liquor at various places in U.P. and Haryana transported the goods from its breweries and distilleries to its place of business in Ernakulam and sold them there. When selling the same, the company made out separate bills for ex-factory price and for freight and handling charges. The Supreme Court held that the freight and handling charges could not be excluded from the taxable turnover under rule 9(f) of the Kerala Rules. It appears to us that the facts in our case are very similar to the one decided by the Supreme Court. In this case also the respondent-dealer had brought the coal from out-of-State places and while selling the same to the local purchasers had prepared the bill showing the price of coal ex-colliery and including the transport and other charges at a uniform rate per metric tonne. We, therefore, consider that the respondent is not entitled to a deduction of those charges from the taxable turnover. We, accordingly, allow these petitions and set aside the order of the Tribunal. The revenue will be entitled to its costs. Counsel's fee Rs. 150 in each case.