SETHURAMAN, J.

The assessee, manufacturers of polythene tabular film, bags, sheets, etc., had reported a total and taxable turnover of Rs. 13, 93, 916.72 for the assessment year 1967-68. The assessing authority determined the total and taxable turnover at Rs. 14, 60, 108.34 and Rs. 14, 09, 260.92 respectively. Included in the said turnover was Rs. 43, 742.91, which represented rebates allowed by the assessee to its purchasers.

In order to appreciate the circumstances under which this rebate has been given, a sample of the correspondence between the assessee and its purchasers has been placed before us. For instance, in the letter dated 13th November, 1967, addressed to M/s. National Tobacco Co. of India Ltd., the assessee acknowledged an enquiry from the said company and quoted for the polythene liners 48"x 30" x 53

"x 500G. These liners are used by the tobacco manufacturers for the purpose of packing tobacco so as to keep the tobacco free from the effects of humidity, etc. The price quoted is Rs. 7.25 per liner ex factory with sales tax at 3 per cent. against C form or otherwise at 10 per cent. It is unnecessary to refer to the other terms except to the "remarks" in the said letter, which run as follows :" *

On receipt of your order, we shall apply for an import licence for the requisite quantity of raw material. If this is issued and import has been made, we shall allow you a rebate of about 50 paise per liner.

"The National Tobacco Co. accepted this officer by its letter dated 17th November, 1967, and placed an order for 3, 900 polythene liners. It enclosed a cheque for Rs. 7, 000 as advance and at the end of the letter noted as follows :" *

We note that a refund of 50 paise per liner will be given to us on receipt of import licence for raw materials against this order.

"The assessee claimed that this amount represented cash discount allowed by it to its buyers and that it was therefore an allowable deduction under section 2(h) of the Central Sales Tax Act. The assessing as well as the appellate authorities rejected this claim. When the matter came before the Tribunal, the Tribunal while holding that the disputed turnover did not represent cash discount, nevertheless allowed the claim of the assessee on the ground that the price to that extent had been reduced and that the said amount did not form part of the price at all.

Aggrieved by this order, the State has come on revision contending that the order of the Tribunal was incorrect in so far as it held that the amount did not form part of the sale price. For the assessee the submission was that the rebate did not form part of the price and that in any event the amount represented only cash discount so that it was allowable as deduction under section 2(h).

The meaning of the word "discount" has been the subject-matter of consideration in cases decided by this and other High Courts. In Baidya Nath Ayurved Bhawan (P.) Ltd. v. Commissioner of Sales Tax the assessee, a manufacturer of medicines, had announced in its price-list payment to its customers and agents purchasing its medicines of an "annuity" at a certain rate on the sale price. No "annuity" was allowed for purchases below a certain sum in a year, but subject to a maximum, it gradually increased according to the total purchases in a year. The assessee claimed that the "annuity" paid was a cash discount and was, therefore, an allowable deduction in computing the turnovers both under the Central Act and under the U.P. Sales Tax Act. The relevant provision of the U.P. Act has been quoted at page 174 of the Reports and it runs as follows :" *

any cash or other discount on the price allowed in respect of any sale .... shall not be included in the turnover."

In the same page, the learned Judges held :

" The provision does not require the discount to be paid in immediately the price is paid. The motive of the dealer in giving a discount to a customer has been defined. The legislature considered it immaterial as to what