( 1. ) THIS is a reference made by the President of the Board of Revenue under Section 44 (1) of the M. P. General Sales Tax Act for answering the question :

Whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that the amounts reimbursed by the manufacturing company on account of replacement of parts during the warranty period and against pre-delivery charges incurred during the warranty period for which no consideration was received from customers are transactions of sale under the provisions of the M. P. General Sales Tax Act, 1958 ?

( 2. ) THE facts stated in the reference are that the assessee, M/s. Prem Motors, deals in cars, tractors, motor-cycles and their spare parts. The assessee was assessed to tax for a period 1st April, 1978, to 31st March, 1979. The disputed question as has been stated by the learned President is as to whether the replacement made free of cost during the warranty period of the customers was liable to tax or otherwise. It is stated that the assessee in a number of cases received spare parts from the principal, i. e. , the manufacturer, in lieu of the spare parts supplied by him to the customers d