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