( 1. ) THIS is a reference made by the Sales Tax Appellate Tribunal referring for our answer the following question of law :

Whether, on the facts and in the circumstances of the case, the railway freight deducted by the assessee in the bill and actually paid by the purchaser at the destination is part of the sale price and as such exigible to sales tax under the Central Sales Tax Act, 1956 and the M. P. General Sales Tax Act, 1958 ?

( 2. ) THE assessee is a paper mill situated at Amlai, district Shahdol. The assessee is engaged in the business of manufacture and sale of different varieties of paper. The relevant period for this case is 1st April, 1966, to 31st March, 1967. The assessee is a registered dealer both under the Central Sales Tax Act, 1956 and the M. P. General Sales Tax Act, 1958. In the assessment proceedings under the Central Act, the assessee claimed that a sum of Rs. 33,96,452 which was paid as freight by the purchasers, should not be included in the sale price and consequently in the turnover. Similarly, in the assessment proceedings under the State Act, the assessee claimed that the amount of Rs. 46,625 paid as freight by the purchasers should not be included in the sale price. The sales tax authorities did not accept this contention of the assessee. The Tribunal also did not accept the assessees contention, relying upon the case of Birla Jute Manufacturing Co. Ltd. v. Commissioner of Sales Tax, M. P. [1972] 29 STC 639.

( 3. ) THE price charged by the assessee from the purchasers is f. o. r. destination. The manner in which the assessee prepares the bills is to record in the printed bill form first the number of gunny packages, then the number of reams or reels, as the case may be, then the description of the quality of the paper sold, its size and weight per ream, packet or substance, its weight in kilograms, the rate per kilogram f. o. r. destination and lastly the amount payable. From the amount recorded as payable, the assessee deducts discount at the agreed rate and adds to the amount remaining after deduction of the discount the Central excise duty and the sales tax payable and from the total of these items deducts the railway freight payable. The railway receipts were obtained in all cases "freight to pay" and the freight in all cases was paid by the purchasers at the destination. The terms of contract used to be entered in a sale note, a sample of which has been annexed as part of the statement of case. Conditions (6) and (7) of the sale note contained on the reverse of the note are material which read as follows :

(6) All goods ordered shall be despatched by goods train. All additional costs for despatch of goods by any other means shall be borne by the buyer. All risks including damages, loss, pilferage, theft, fire accident, etc. , shall pass on to the buyer with the delivery of goods to carrier or his agent and the company shall in no way be responsible for any or all loss or damage notwithstanding that the goods were not despatched on carriers risk. (7) Demurrage incurred on the consignment due to non-payment, late payment or late delivery of the documents are to be borne by the buyer. In case the documents are not retired, the company shall hold the buyer responsible for all other consequences arising thereof.

( 4. ) THE definition of "sale price" in both the Acts is nearly the same. We may, therefore, only quote the definition as contained in the Central Act, which is as follows : sale price means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for any-thing done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged.

( 5. ) THE law applicable on the point has recently been clarified by the