ORDER
P.K. Tare, C.J.
1. This order shall govern the disposal of Misc. Civil Case No. 147 of 1969 -- Commissioner of Sales Tax, M.P. v. Gill and Co. Private Ltd., Ujjain -- also. Misc. Civil Case No. 147 of 1969 relates to the imposition of sales tax under the Madhya Pradesh General Sales Tax Act, 1958; while Misc. Civil Case No. 146 of 1969 relates to the imposition of sales tax under the Central Sales Tax Act, 1956. The sales tax in question relates to the period from 1st April, 1966, to 31st March, 1962.
2. Before the Sales Tax Officer the respondent claimed a deduction of Rs. 23,104 on account of freight, which he claimed he had not charged although it might have been shown in the bills produced. The Assistant Commissioner of Sales Tax disallowed that claim of the assessee and added that amount to the gross turnover. Against that order an appeal was preferred before the Deputy Commissioner of Sales Tax, who affirmed the view of the Assistant Commissioner of Sales Tax and dismissed the appeal. On a further appeal to the Board of Revenue, the learned Member of the Board of Revenue allowed the appeal partly by giving credit for the freight, but dismissed the appeal so far as the packing materials were concerned. On a request by the Commissioner of Sales Tax, the learned Member of the Board of Revenue has referred the following question for our consideration under Section 44(1) of the M.P. General Sales Tax Act, 1958:
Whether, under the facts and circumstances narrated above, the railway freight deducted in the bill is not part of the sale price as defined in Section 2(o) of the M.P. General Sales Tax Act, 1958
3. So far as the bills produced before the sales tax authorities were concerned, the amount of freight, it appears, was not separately shown. But, as per the finding of the Board of Revenue, there was definite material to show that the freight had not been charged by the assessee and, on the other hand, he had given deduction of the amount of freight to the purchaser. It is in the light of this finding recorded by the learned Member of the Board of Revenue that we are required to answer this reference.
4. Sale price has been defined by Section 2(o) of the M.P. General Sales Tax Act, 1958, as follows:
'Sale price' means the amount payable to a dealer as valuable consideration for the sale of any goods, less any sum allowed as cash discount according to ordinary trade practice but including any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the cost of freight or delivery or the cost of installation when such cost is separately charged and the expression 'purchase price' shall be construed accordingly.
5. Thus, what is necessary for a freight to constitute sale price is that it should not be separately charged and it should be a part of the total price that the assessee may charge to the customer. In this connection, we might further observe that the bill by itself will not be conclusive of this question in some types of cases at least. There may be cases where the bills produced are the only material to show the agreement between the parties as also the fact whether freight was actually charged or not; after all bills would be an inclusive piece of evidence which evidence would be rebuttable. If the contention of the learned Government Advocate were to be accepted, it would imply that the bill should be treated as conclusive evidence of the agreement between the parties as also the fact whether the freight was separately charged or not,
6. With due respect to the learned Government Advocate, we are unable to accept such an interpretation. Ultimately, it depends on two factors: (i) as to what was the agreement between the assessee and the purchaser and (ii) whether the freight was separately charged or whether it was part and parcel of the sale price which the customer paid to the assessee-dealer. The learned Government Advocate invited our attention to the observations of a Division Bench of this Court in Commissioner of Sales Tax, M.P. v. Maratha Syndicate Pvt. Ltd., Gwalior 1970 Revenue Nirnaya 235, to which one of us, namely, Tare, J. (as he then was), was a party. We may usefully reproduce the observations made by Bisbambhar Dayal, C.J., in that case as follows:
From the definition, it is quite clear that in order to get a deduction for the freight it was necessary to enter into a contract with the purchaser fixing the price of the article separately and the freight separately. If the freight has not been separately mentioned in the agreement to purchase and is included in the total price to be charged, then deduction cannot be claimed for the amount actually spent on freight. The bills which have been produced in the present case show that the purchaser has agreed upon to pay the total price, including the freight and the expenses necessary for sending the article to the purchaser. When the seller sends the goods to the purchaser, he does not pay the freight himself. He sends the loading documents, and when the purchaser receives the articles he pays the freight to the carrier and pays the balance to the seller. It is for this purpose that in the bills the freight is shown separately and is deducted from the total price agreed upon. These transactions indicate that the seller was agreed to charge the total price, including the freight, etc., and so the whole amount is covered by the definition of sale price as quoted above.
7. We may observe that we are in agreement with the view expressed by the said Division Bench. Two things are necessary in order to make the freight a part of the sale price. Firstly, there should be no agreement about charging freight separately and, secondly, it should not be charged separately, but it should be a part and parcel of the total sale price that the assessee-dealer might charge the purchaser-customer. If these two things are present, the amount of freight or other sundry expenses can be said to constitute a part of the sale price. But, if there be other materials to show that there was agreement in this behalf not to charge freight so as to be included in the sale price, in that event, the freight cannot at all be made a part and parcel of the sale price and the bills would certainly constitute inclusive piece of evidence. But they cannot be treated to be a conclusive piece of evidence. After all, the presumption arising on account of the recitals in the bills would be rebuttable and if there be other material, in that event, and on proof of the two things, namely, that there was an agreement not to charge freight as part of the price and that actually it was not so charged, the freight cannot constitute a part and parcel of the sale price as defined by Section 2(o) of the M.P. General Sales Tax Act, 1958.
8. Further attention was invited to the observations of another Division Bench of this Court in Birla Jute . v. Commissioner of Sales Tax, M.P. [1972] 29 S.T.C. 639. We may observe that the said case also is more or less on the same lines as the earlier case mentioned above and it does not lay down any proposition different from the one we have propounded above.
9. The learned Government Advocate also invited attention to the observations of their Lordships of the Supreme Court in Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kuinool [1960] 11 S.T.C. 827 (S.C.). We are unable to find any such proposition in the observations of their Lordships of the Supreme Court as is sought to be suggested by the learned Government Advocate. There can be no doubt that the recitals in the bills by themselves will be inclusive piece of evidence and, in the absence of any other material, they will furnish good proof of the intention of the parties relating to the terms of the agreement, or the freight being charged. But it would be too much to accept the contention that the bills should be treated as conclusive piece of evidence. That proposition, in our opinion, would be contrary to the provisions of the Indian Evidence Act. Thus, the pronouncement of their Lordships of the Supreme Court, far from supporting this suggestion, would actually go against that contention and there can be no doubt that as laid down by their Lordships, the recitals in the bills will certainly have great evidentiary value, which, in the absence of anything more, ought to be taken to be correct. But, it cannot conclude the matter and, at any rate, cannot prevent the assessee from producing other materials in rebuttal.
10. As a result of the discussion aforesaid, it is clear that the view taken by the learned Member of the Board of Revenue was perfectly justified and for that reason, we answer the reference as follows:
That, under the facts and circumstances of the case, the railway freight deducted in the bill could not be a part of the sale price as denned in Section 2(o) of the M.P. General Sales Tax Act, 1958.
11. Let the reference be returned to the Board of Revenue for passing the final order in accordance with our opinion. There shall be no order as to costs, especially when the respondent was not represented in this court.