HINDUSTAN SUGAR MILLS ETC. vs STATE OF RAJASTHAN AND ORS.

The Supreme Court ruled that under Section 2(p) of the Rajasthan Sales Tax Act, 1954 and Section 2(h) of the Central Sales Tax Act, 1956, the freight charges do not form part of the 'sale price' when the sale is made 'free on rail destination railway station'. The Court held that the sales tax authorities' inclusion of freight in the turnover for sales tax assessment was incorrect, thereby allowing the assessee's appeal. The judgment clarified the distinction between contracts of sale regarding freight charges and their implications for sales tax liability.