Customs duties paid by the buyer after completion of the sale and after becoming the owner of the goods are not part of the sale price and cannot be included in the seller's sales turnover.

The judgment of the Court was delivered by

SMT. SUJATA MANOHAR, J. - In all these references the applicant is M/s. Gujarat Export Corporation Limited. The applicant at all times material for the reference was a registered dealer under the provisions of the Bombay Sales Tax Act, 1959, as well as under the Central Sales Tax Act, 1956. During the financial years 1973-74 and 1974-75, the applicant imported chemicals. These chemicals were sold by the applicant to various dealers at Bombay.

2. One such contract of sale was between the applicant and M/s. Ashok Traders. It is dated 18th April, 1973. This contract has been relied upon by the consent of parties as the contract which can be considered as representative of all such contracts, for the purposes of these references. The buyers paid the customs duty on the goods and cleared the goods from the customs. The sales tax authorities have included the customs duties so paid in the sale price of the goods. This is disputed by the applicant. The Tribunal has, therefore, referred the following question to us under section 61(1) of the Bombay Sales Tax Act as a common question in all the references :

"Whether, on the facts and ion the circumstances of the case, the Tribunal was correct in law in holding that the customs duty paid by the applicant's buyer-customs formed part of the sale price of the imported goods sold by the applicant to its customer for the purpose of the Bombay Sales Tax Act, 1959, and for the purpose of Central Sales Tax Act, 1956 ?"

3. The applicants initially contended before the sales tax authorities that the sales were in the course of import. But this contention was not pressed. They submit that in view of the terms contract of sale, customs duties paid by their buyers cannot be included in the sale price.

4. The contract of sale is in the form of a letter from the applicants to their buyers,

Clauses 1, 2, 3, 5, 7, and 8 of the contract are as follows :

1. Value :

We offer you Hexamine to the extent of c.i.f. value Rs. 1,40,000 against import licences.

2. Compensation :

We would be charging you a compensation of Rs. 1,47,000 over and above the c.i.f. value payable on confirmation of sale.

3. Sales tax :

We shall be charging you sales tax applicable at the time of delivery. If desired, the sale will be on high sea's basis.

5. Full payment of the c.i.f. value against intimation of the documents from the bank, plus you will also pay all charges, applicable duties, handling charges, clearing and forwarding charges, etc., to enable us to clear the material. If you require high sea's sale, the bill will have to be retired one week earlier to the arrival of the steamer.

7. Import duty :

Any change in the c.i.f. value and import duty, etc., will be entirely to your account and you will pay the same at the actuals.

8. Brokerage :

2 per cent brokerage on c.i.f. value will be payable to M/s. J. Ramniklal & Co. 69 Kazi Syed Street, Bombay-400 009.

5. The applicants, under clauses 1 and 2 of the contract charged their customers c.i.f. value of the goods imported plus compensation of Rs. 1,47,000 over and above the c.i.f. value. Under clause 5 of the contract full payment of the c.i.f. value was required to be made against intimation of the documents from the bank. The buyers were also required to pay all charges, applicable duties, etc., for clearing the goods from the customs. Under clause 7 any changes in the c.i.f. value or in the import duty were on the buyer's account. Under the terms of the contract, therefore, the sale was against delivery of documents. The liability to pay customs duty was on the buyers. It is accepted position that the goods were in fact cleared from the customs by the buyers themselves on payment of customs duty. In these circumstances it is submitted by Mr. Patel, learned Advocate for the applicant, for the applicant, that the consideration for sale was only the c.i.f. value of the goods, plus compensation and that customs duty which was