M.K Srinivasa Iyengar & Rama Jois, JJ.

Rama Jois, J.:—

These are nine connected sales-tax Revision Petitions. In these Petitions, the question of law which arises for consideration is as to whether the freight charges collected by the assessees separately from the customers over and above the sale price of the trucks and ambassador cars of which they are the dealers, are deductible from the total turnover under Rule 6(4)(f) of the Karnataka Sales Tax Rules, 1957 (hereinafter referred to as ‘the rules’).

2. The brief facts which have given rise to these Revision Petitions are as follows: The petitioners in S.T.R.P Nos. 76 to 79 of 1975 are Arvind Motors, Mangalore. They deal in chassis of Tata Mercedez Benz trucks. United Trading Corporation & Workshop (P) Ltd., Mangalore, who are Petitioners in the other batch are dealers inter alia in ambassador cars. During the assessment years 1966-1967 to 1969-1970 in the case of Arvind Motors and during the assessment years 1966-1967 to 1970-1971 in the case of United Trading Corporation & Workshop (P) Ltd., they claimed deduction of the amounts representing freight charges and transit insurance charges in respect of the vehicles sold by them to the customers during the relevant period under Rule 6(4)(f) of the Rules. The Assessing Authority allowed the claim relying upon the decision of this Court in Webb's Sales and Service (P) Ltd. v. Commissioner of Commercial Taxes, Bangalore . 24 STC 84.. Thereafter the Deputy Commissioner of Commercial Taxes, in exercise of his suo moto powers of revision under Section 21(2) of the K.S.T Act, 1957 revised the orders on the ground that the orders of the Assessing Authority were erroneous and prejudicial to the Revenue. In doing so, he relied on the Division Bench decision in M/S. Agro Pvt. Ltd. Bangalore-27… v. The State Of Mysore…. . 34 STC 1.. In the said decision, this Court held that the earlier decision in Webb's case was no longer good law in view of the decision of the Supreme Court in Dyer Meakin Breweries Ltd. v. State Of Kerala . 26 STC 248. and in D.C Johar & Sons (P) Ltd. v. Sales Tax Officer, Ernakulam . 27 STC 120.. Aggrieved by the said orders, the assessees preferred appeals before the Sales Tax Appellate Tribunal. The Tribunal affirmed the orders of the Deputy Commissioner. Against the said orders, the assessees have preferred these Revision Petitions.

3. Briefly stated, the facts which are necessary to appreciate the question of law arising for consideration are as follows: An application is presented by every customer registering his name for the purchase of either a Tata Mercedez Benz chassis or an Ambassador car. The proforma of the relevant condition incorporated and accepted by the applicant is in the following term:

“The above car (or commercial vehicle) should be brought on my/our behalf from Calcutta/Jamshedpur to Mangalore and I/we will bear transportation charges and transit insurance that may be incurred thereto.”

The wordings of the relevant part of the communication given by the assessee in reply to such an application reads-

“The registration is hereby acknowledged and the number of your registration is * * * Prices ruling on the date of delivery only will be applicable.”

After the communication is received from the manufacturers that a vehicle is allotted to any particular customer, the dealer communicates the said information to the customer and thereafter the customer makes the purchase of the vehicle. The price of the vehicle and the freight charges are collected by separate documents, i.e, (1) sale bill containing the retail price of the vehicle fixed by the manufacturers, and (2) a separate debit note for transportation and transit insurance charges.

4. In all these cases the freight and transit insurance charges were collected by the assessees in the above manner. The case of the assessees was that as the agreement between them and the customers for the supply of the vehicle contained a specific clause to the effect that the customer had to bear the freight and transit insurance charges, the amounts representing these two items ought to have been deducted in the sale price in view of Rule 6(4)(f) of the Rules. As stated earlier though the Assessing Authority accepted this contention, in view of the decision of this Court in Webb's case, the Deputy Commissioner revised the order following the decision in Agro Private Ltd. In order to find out as to whether the decision in Webb's case has been affected by the decision of the Supreme Court, it is necessary to set out the substance of the decision in Webb's case. It is as follows:

(1) It was held that if a dealer entered into a contract for the supply of a vehicle and thereafter purchased the vehicle pursuant to such contract from its manufacturer and sold it for a price to the same customer and also collected the freight charges incurred for transporting the vehicle from the place of purchase to the place of his business, separately it was deductible under Rule 6(4)(f) of the Rules.

(2) The question as to whether a dealer can claim deduction of freight charges paid on goods of which he was a dealer generally without any prior contract for the supply of the goods with any individual customer just because he chose to mention in the sale bills the price of the article and freight charges separately, though raised was specifically left open.

5. Sri K. Srinivasan, learned Counsel for the assessees, contended that the decision of the Supreme Court in the case of Dyer Meakin Breweries Ltd., covers only the second question which was left open in Webb's case, and that as far as the first question which was decided by this Court in Webb's case was concerned, it was not covered by the said decision but on the other hand, there were observations in the Judgment of the Supreme Court which supports the view taken by this Court in Webb's case. The relevant portion of the Judgment of the Supreme Court reads as follows:

“It is common ground that the sale of the liquor took place in Ernakulam. The company arranges to transport liquor for sale from the factories to its warehouse at Ernakulam. It was not brought for any individual customer. All the expenditure incurred is prior to the sale and was evidently a component of the price for which the goods were sold. It is true that separate bills were made out for the price of the goods ex-factory and for “freight and handling charges.” But, in our judgment, the Tribunal was right in holding that the exemption under Clause (i) of Rule (9) applies when the freight and charges for packing and delivery are found to be incidental to the sale and when they are specified and charged for by the dealer separately and expenditure incurred for freight and packing and delivery charges prior to the sale and for transporting the goods from the factories to the warehouse of the company is not admissible under rule 9(f). Rule 9(f) seeks to exclude only those charges which are incurred by the dealer either expressly or by necessary implication for and on behalf of the purchaser after the sale when the dealer undertakes to transport the goods and to deliver the same or where the expenditure is incurred as an incident of sale.”

(Underlined by us)

Learned Counsel in particular, relied on the underlined portions.

6. From the aforesaid decision, it is clear that in the said case, the assessee, who was having distilleries or breweries in the State of Haryana and Uttar Pradesh, transported Indian made foreign liquor to Ernakulam in the State of Kerala, wherein it had its place of business and while selling the liquor to customers, the sale price of the liquor and so called freight charges were separately mentioned and the claim made by the assessee was that the freight charges must be deducted from the sale turnover relying on Rule 9 of the Kerala General Sales Tax Rules, 1963, which is similar to Rule 6(4)(f) of the Rules. The contention was negatived on the ground that the liquor was not transported at the instance of any customer and it was part and parcel of sale price. In other words, the view taken was that the freight charges were inseparable from the price of the liquor at which it was sold to the customers. The portions underlined support the submission made for the assessees that the decision was not intended to cover a case where the goods were bought and brought for any individual customer and/or where the freight charges were incurred as incidental to such sale transactions and in particular to cases where there was prior agreement to the effect that the customer should bear the freight charges.

7. In Webb's case, this Court decided that if the goods were brought pursuant to an order placed by an individual customer, the assessee was entitled to claim freight charges, if it was charged separately. This question, it appears to us, is not covered by the Judgments of the Supreme Court in either Dyer Meakin Breweries or D.C Johar as submitted by the learned Counsel for the assessees. However, in Agro Private Ltd., a Division Bench of this Court has specifically stated that in view of these two decisions of the Supreme Court, the Division Bench decision in Webb's case impliedly stands over ruled.

8. In the circumstances, we are of the view that the decision in Agro Private Ltd., requires reconsidertion and therefore we consider it necessary and proper to refer the following question for the opinion of the Full Bench under Section 7 of the Karnataka High Court Act, 1961.

“Whether the Division Bench decision of this Court in Webb's Sales and Service (P) Ltd. v. Commissioner of Commercial Taxes, Bangalore (24 STC 84) has been impliedly over ruled by the decisions of the Supreme Court in Dyer Meakin Breweries Ltd. v. State Of Kerala (26 STC 248) and D.C Johar & Sons (P) Ltd. v. Sales Tax Officer, Ernakulam (27 STC 120)?”

OPINION OF THE FULL BENCH

Rajasekhara Murthy, j.

A Division Bench of this Court consisting of Sri Srinivasa Iyengar and Sri Rama Jois, JJ. has referred the following question of law for the opinion of the Full Bench:

“Whether the Division Bench decision of this Court in Webb's Sales and Service (P) Ltd. v. Commissioner of Commercial Tuxes, Bangalore (24 STC 84) has been implidely over ruled by the decisions of the Supreme Court in Dyer Meakin Breweries Ltd. v. State Of Kerala (26 STC 248) and D.C Johar & Sons (P) Ltd. v. Sales Tax Officer, Ernakulam (27 STC 120)?”

2. In order to appreciate the question referred, it is necessary to notice the facts that are not in dispute, in the first instance.

United Trading Corporation and Workshops Private Ltd., a private limited company incorporated under the Companies Act, and Arvind Motors, Mangalore, a registered partnership firm engaged in the business of selling Motor-cars and trucks, such as Ambassador Cars, Tata Mercedes Benz trucks on agency basis in Mangalore used to get them from their manufacturers having their factories at Calcutta and Jamshedpur. Both of them are registered dealers under the Karnataka Sales Tax Act of 1957 and the Central Sales Tax Act of 1956 (‘KST & CST Acts’). The new cars and trucks are first purchased by the assessees from their manufacturers outside the State, and then they are brought and sold to their customers or purchasers within the State of Karnataka. In the normal circumstances, the freight and insurance charges incurred by the assessees prior to the delivery of the vehicles at their place of business to their purchasers or customers, would form part of the sale price recovered by the assessees from their purchasers and customers. But, evidently with the sole object of avoiding payment of sales-tax under the KST Act, on such freight charges collected an arrangement or an agreement is entered into between the assessees and their individual purchasers or customers providing for charging separately the freight and insurance charges incurred by the assessees on each car or truck to be borne by the purchasers as the case may be, in these terms:—

“The above car (or commercial vehicle) should be brought on my/our behalf from Calcutta/Jamshedpur to Mangalore I/we will bear transportation charges and transit insurance that may be incurred thereto.”

3. In the returns submitted by the assessees for the years in question they included in the taxable turn-over only the retail price of the vehicle exigible to tax under the KST and CST Acts, and claimed exemption in respect of the freight and insurance charges, for which the assessees had issued separate debit note to their customers.

4. The CTO completed the assessments allowing the claim of the assessees relying on a ruling of this Court in Webb's Sales and Service (P) Ltd., case and distinguishing the ruling of the Supreme Court in Dyer Meakin Breweries Ltd. v. State Of Kerala.

The Deputy Commissioner of Commercial Taxes, Mangalore (‘the D.C’) in exercise of his powers of suo moto revision conferred by Section 21(2) of the KST Act, held that the exempted turnover relating to freight and insurance charges should be included in the taxable turnover of the assessees.

Being aggrieved by the order of the Deputy Commissioner, the assessees filed appeals before the Karnataka Sales Tax Appellate Tribunal, Bangalore, (‘Tribunal’) under Section 22 of the Act. The Tribunal by its order dated 30th August 1975 dismissed the appeals and upheld the order of the D.C

Both the D.C and the Tribunal relied upon a ruling of this Court in M/S. Agro Pvt. Ltd. Bangalore-27… v. The State Of Mysore…. and observed in the course of their order that the decision of this Court in Webb's Sales and Service Case is impliedly over-ruled by the Supreme Court in Dyer Meakin Breweries Ltd., case.

5. Before the Division Bench which referred the matter to a larger Bench, the assessees maintained that the declaration made by this Court in Agro (P) Ltd. case was erroneous and the earlier ruling in Webb's Sales and Service (P) Ltd., case which had correctly interpreted the provisions of the KST Act was still good law and their cases were governed by Webb's case only. This contention of the assessees was naturally countered by the Revenue. On an examination of the rival contentions, the Referring Bench doubting the view expressed by the Division Bench in Agro (P) Ltd.'s case has referred the question to a Full Bench of this Court for opinion.

6. Sri K. Srinivasan, learned Counsel for the assessees urged for answering the question in the negative while Sri S. Rajendra Babu, learned Government Advocate appearing for the Revenue urged for answering the question in the affirmative.

7. Before we examine the several rulings, we consider it appropriate to briefly notice the scheme and object of the Act and some of the material provisions which have a bearing on the question referred.

The KST Act has been enacted to levy tax on the sale/purchase of goods in the State of Karnataka. The terms, ‘sale’ ‘turnover’ ‘total turnover’ and ‘taxable turnover’ have been defined in Section 2 of the Act as hereunder.

Section 2(t) of the Act defines the term ‘Sale’ thus:—

“Sale” with all its grammatical variation and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge.”

On this very definition of the term ‘Sale’ itself the assessees who purchase the trucks and cars from their manufacturers on making payment towards their price which included the freight and insurance charges incurred for bringing the vehicles from the places of their manufacture to the place of delivery and in turn charge those amounts to their customers cannot contend that those charges do not form part of their sale price and is, therefore, not includible in their turnover.

“Taxable Turnover” is defined under Section 2(u-1), as follows:—

“2(u-1) “taxable turnover” means the turn-over on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed, but shall not include the turnover of purchase or sale in the course of interstate trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India”

“Total turnover” is defined under Section 2 (u-2), as follows:

“2(u-2) “total turnover” means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable for tax, including the turnover of purchase or sale in the course of inter-state trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India.”

Rule 6(1) of the K.S.T Rules (‘Rules’) that regulates the mode of determination of total and taxable turnover, reads thus:—

“6. Determination of total and taxable turnover.—

(1) The total turnover of a dealer, for the purposes of the Act, shall be the aggregate of—

(a) the total amount paid or payable by the dealer as the consideration for the purchase or any of the goods in respect of which tax is leviable at the point of purchase under one or more of the provisions specified hereunder where such purchase has taken place inside the State.”

Rule 6(4)(f) that provides for the deductions of freight charges from the total turnover, which Clause is material reads:

“(4) In determining the taxable turnover, the amount specified in clauses (a) to (k) shall, subject to the conditions specified therein, be deducted from the total turnover as determined under clauses (a) and (b) of Sub-rule (1).

(f) all amounts falling under the head ‘freight’, when specified and charged for by the dealer separately without including such amounts in the price of the goods sold;”

Rule 9(f) of the Kerala Sales Tax Rules, framed under the Kerala General Sales Tax Act, 1963, corresponding to Rule 6(4)(f)(i) of the Rules, which reads as follows:—

“In determining the taxable turn-over, the amount specified in the following clauses shall, subject to the conditions specified therein, be deducted from the total turnover of the dealer……..

(f) all amounts falling under the following two heads, when specified and charged for by the dealer separately, without including them in the “price of goods sold;”

(i) freight,

(ii) charges for packing and delivery.”

(Underlining by us)

8. The Central Sales Tax Act of 1956, that regulates the levy of sales tax on inter-state sale defines the term “Sale” thus:—

“Sale” with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods;”

9. Chapter II Section 3 of the Central Sales Tax Act lays down the principles for determining when a ‘sale’ or ‘purchase of goods’ takes place in the course of Inter-State Trade or Commerce or outside State, or in the course of import or export.

“3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase-

(a) occasions the movement of goods from one State to another; or

(b) is effected by a transfer of documents of title to the goods during their movement from one State to another.”

The definition of “Sale” in the CST Act is the same as defined under the KST Act.

10. We are required to furnish the opinion, whether the decision of this Court in Webb's Sales and Service case is impliedly overruled by the decision of the Supreme Court in Dyer Meakin case, and the case of D.C Johar and Sons.

In Webb's case, the facts in brief were these:—

The appellants-assessees in that case, Webb's Sales and Service were dealers in motor trucks manufactured by Tatas in their factory at Jamshedpur. In the invoice prepared by the appellants with reference to sales which were effected pursuant to the orders placed by their customers, the retail price fixed by the manufacturer was shown separately and the amount incurred by the appellants for bringing the trucks from Jamshedpur to Bangalore was shown separately. But the amount paid by the purchaser towards the vehicle sold to him was the aggregate of the retail price of the vehicle and the freight charges.

In the assessment under the KST Act, the appellant claimed deduction of the freight charges from its total turnover under Clause (i) of Rule 6(4)(f) of the KST Rules. That deduction which was disallowed by the CTO, was allowed by the D.C in appeal, but again disallowed by the Commissioner in exercise of his revisional powers conferred on him by Section 22A of the Act. The assessees filed an appeal before the High Court challenging the order of the Commissioner.

The High Court, while agreeing with the appellants' contention held as follows at page 86:

“The freight to which clause (f) refers is the freight which has been paid by the dealer in the context of a sale which he has agreed to make to the customer. So, the freight paid by the dealer in order to bring the goods from any place to any other place after he has agreed to sell the goods to the customer so that he could deliver these goods to the customer at the point specified by him, is of course deductible under clause (f) of Rule 6(4). If the dealer agrees to sell to the customer goods of a particular description and these goods have to be purchased by the dealer from the manufacturer so that there could be an implementation of that agreement to sell, and the customer who agreed to purchase these goods consents to pay the freight which the dealer has to incur for bringing the goods from the place of manufacture to the place where the purchaser wants them to be delivered, there could be very little doubt that the freight incurred by the dealer in that situation falls wholly within clause (f)(i) of rule 6(4).”

11. This Court had occasion to consider the correctness of this decision in a later case in M/S. Agro Pvt. Ltd. Bangalore-27… v. The State Of Mysore….. The facts of that case were:—

The assessee-company had acquired the right exclusively to deal in the motor-cycles manufactured by Escorts Ltd., in their factory situated in the State of Haryana, in the State of Mysore. In its return filed under the KST Act, the assessee claimed deduction in respect of the freight charges incurred by it in transporting the motor-cycles from the site of the factory in Haryana to Bangalore, its place of business. The assessing authority disallowed that claim and levied sales tax on the freight charges incurred by the assessee and that order was confirmed in the appeals before the D.C and the Tribunal. Aggrieved by the order of the Tribunal, the assessee preferred a Revision Petition before the High Court.

12. The assessee Agro (P) Ltd., had claimed deduction of the freight charges under Rule 6(4)(f)(i) relying upon the decision of this Court in Webb's case. Disallowing that claim the High Court (in Agro (P) Ltd. Case) opined that the view expressed by the Division Bench in Webb's case was no longer good law in view of the two decisions of the Supreme Court in the cases of Dyer Meakin and D.C Johar, which were rendered after Webb's case was decided by this Court.

This Court considered the facts in Dyer Meakia Breweries (P) Ltd., and those involved in D.C Johar and Sons and took the view that the decision in D.C Johar and Sons (P) Ltd., Case was on all fours with the Agro (P) Ltd., and further held that the ratio of the Supreme Court in the two decisions of the Supreme Court referred to above should govern the case in Agro (P) Ltd., Case also.

This Court observed at page 4 of its Order thus:

“In view of the decisions of the Supreme Court referred to above and in particular the decision in the case of D.C Johar & Sons (P) Ltd., we are of the opinion that the decision of this Court in the case of Webbs Sales and Service (P) Ltd. stands impliedly overruled. The Tribunal below was right in holding that the petitioner was not entitled to claim deduction in respect of the freight charges under Rule 6(4)(f)(i) of the Rules.”

13. At this juncture, it would be necessary to extract the facts involved and the observations made by the Supreme Court in Dyer Meakin Case by Sri Shah, Acting C.J:

Dyer Meakins, a company registered under the Kerala Sales Tax Act, as a dealer, transported for sale from its breweries and distilleries in UP and Haryana to its place of business in Ernakulam. The assessee-company made out two bills-one for the ex-factory price and the other for “freight and handling charges” separately and claimed deduction of the freight charges under Rule 9(f) of the Kerala Sales Tax Rules. That claim was rejected by all the authorities under the Act and the revision filed before the High Court of Kerala was also dismissed. In the further appeal filed by the assessee before the Supreme Court, the Supreme Court held in the context of the provisions of the Kerala Act and after examining Rule 9(f) of Kerala General Tax Rules, 1963, at page 250 of the Judgment as follows:—

“Rule 9(f) of the Kerala General Tax Rules, 1963 provides:

“In determining the taxable turnover, the amount specified in the following clauses shall, subject to the conditions specified therein, be deducted from the total turnover of the dealer….

(f) all amounts falling under the following two heads, when specified and charged for by the dealer separately without including them in the price of goods sold;

(i) freight,

(ii) charges for packing and delivery.”

The company claims that the amount expended by it for freight and for “handling charges” of goods from the factories to the warehouse at Ernakulam is liable to be excluded from the taxable turnover and the taxing authorities and the High Court were in error in refusing to allow the deduction.

It is common ground that the sale of the liquor took place in Ernakulam. The company arranges to transport liquor for sale from the factories to its warehouse at Ernakulam. It was not brought for any individual customer. All the expenditure incurred is prior to the sale and was evidently a component of the price for which the goods were sold. It is true that separate bills were made out for the price of the goods ex-factory and “freight and handling charges”. But, in our judgment, the Tribunal was right in holding that the exemption under clause (f) of rule 9 applies when the freight and charges for packing and delivery are found to be incidental to the sale and when they are specified and charged for by the dealer separately and expenditure incurred for freight and packing and delivery charges prior to the sale and for transporting the goods from the factories to the warehouse of the company is not admissible under rule 9(f). Rule 9(f) seeks to exclude only those charges which are incurred by the dealer either expressly or by necessary implication for and on behalf of the purchaser after the sale when the dealer undertakes to transport the goods and to deliver the same or where the expenditure is incurred as an incident of sale, it is not intended to exclude from the taxable turnover any component of the price, expenditure incurred by the dealer which he had to incur before sale and to make the goods available to the intending customer at the place of sale.

14. We may now refer to D.C Johar & Sons Case, which was disposed of by the Supreme Court on the same day following their decision rendered earlier in Dyer Meakin Breweries Ltd., the facts being identical with the facts in Dyer Meakin's Case. In that case also the assessee-company (D.C Johar and Sons) had claimed deduction of freight and packing and delivery charges in respect of which separate bills were made out when selling the goods at Ernakulam. The Supreme Court held, that the transport charges formed a component of the price for which goods were sold and held that the tax levied was not a tax on railway freight but it is a tax on turnover, that is on the aggregate of sale price received by the dealer in respect of sale of goods. So saying, the Supreme Court dismissed the appeals.

From the above discussion, it follows that it was rightly held by the Division Bench in Agro (P) Ltd., that the decision rendered earlier by this Court in Webb's case was no longer good law and that it should be deemed to have been impliedly overruled by the two decisions of the Supreme Court in Dyer Meakin Breweries Ltd., and D.C Johar and Sons Cases.

The contention of the assessees before the Division Bench in the STRPs., that if the goods are brought pursuant to an order placed by an individual customer it is liable to be deducted from the total turnover has no substance and has to be rejected.

We also derive support from a later decision of the Supreme Court in Hindustan Sugar Mills Case5 in which their Lordships followed the principle laid down in Dyer Meakin Breweries Ltd., Case, and reaffirmed the same.

The question before the Supreme Court in the said case was: Whether the sale of cement effected under the Cement Control Order, 1967, the amount of freight forms part of the “Sale price” so as to be exigible to sales-tax under the Rajasthan Sales-Tax Act.

15. In Hindustan Sugar Mills' Case, the assessee entered into diverse contracts of sale of cement with the purchasers at the price fixed by the cement Control Order. The assessee in fulfilment of these Contracts, despatched the cement to the purchasers at various destinations by rail and the railway receipts were made out on the basis of “freight to pay.”

The question arose as to whether the freight-charges deducted from the aggregate amounts shown by the assessee in its invoices formed part of the “Sale Price” within the meaning of that term in Section 2(p) of the Rajasthan Sales Tax Act and the C.S.T Act.

The Sales-Tax Authorities took the view that the freight charges formed part of the “Sale price” and was, therefore, liable to be included in the total turnover of the assessee for the purpose of assessment to sales-tax.

The assessee challenged the correctness of this view by filing a Writ Petition in the High Court of Rajasthan. But the High Court agreed with the view taken by the Sales-Tax Authorities. The assessee thereupon preferred the appeal before the Supreme Court.

16. The Supreme Court in the said decision considered the definition of “Sale Price” in Section 2(p) of the Rajasthan Sales-Tax Act, which reads as follows:

“….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 anything 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 case where such cost is separately charged.”

The Supreme Court, analysing the definition of “Sale price” observed that:

“Sale price” means the amount payable to a dealer as consideration for the sale of any goods. Here, the concept of real price or actual price retainable by the dealer is irrelevant. The test is, what is the consideration passing from the purchaser to the dealer for the sale of the goops, It is immaterial to enquire as to how the amount of consideration is made up, whether it includes excise duty or sales tax or freight. The only relevant question to ask is as to what is the amount payable by the purchaser to the dealer as consideration for the sale and not as to what is the net consideration retainable by the dealer.”

The Supreme Court further observed with regard to “freight and handling charges” that:

“What the dealer receives as the price for which the goods are sold is inclusive of freight and handling charges incurred by him in transporting the goods and that the said charges included in the price would undoubtedly be a part of the sale price.”

17. In a recent decision of this Court in Premier Breweries Ltd. v. The State Of Karnataka . 1984 KLJ Tri 35. the ratio of the above decision was followed, and it was held, that “Freight and handling charges” if it becomes part of the price for which the goods are sold, then it is not liable to be excluded under Rule 6(4)(f) One other similar decision of this Court on the point is that rendered in State v. Yadvad and Co. . STRP No. 30 of 1982 DD. 12 January 1984.

After carefully examining all the facts involved in the Webb's case, and the two cases of the Supreme Court in Dyer Meakin Breweries Ltd. and D.C Johar & Sons (P) Ltd., we overrule the decision rendered in Webb's case.

18. In the light of the law laid down in several decisions referred to supra rendered by the Supreme Court, we answer the question referred to us in the affirmative and hold that the Division Bench decision of this Court in Webb's Sales and Service (P) Ltd. v. Commissioner of Commercial Taxes, Bangalore (24 STC 84), has been impliedly overruled by the decisions of the Supreme Court in Dyer Meakin Breweries Ltd. v. State Of Kerala (26 STC 248), and D.C Johar & Sons (P) Ltd. v. Sales Tax Officer, Ernakulam (27 STC 120)

ORDER BY DIVISION BRANCH

Dated 28th May 1985

These Revision Petitions are by the assessees and are directed against the order dated 30-8-1975 of the Karnataka Sales Tax Appellate Tribunal, Bangalore (Tribunal) in S.T.A Nos. 239 to 247 of 1975.

2. The facts of the cases and the sole question that arises for decision have been set out in detail in the opinion rendered by a Full Bench of this Court on 18-4-1985 which has answered the same against the assessees. In the light of the opinion rendered by the Full Bench the orders challenged by the assessees do not call for our interference and these revision petitions are liable to be dismissed. We, therefore, dismiss these Revision Petitions.