Sale price deductions and freight inclusion turn on contract terms, while fact findings on situs remain binding in reference proceedings.

Under the statutory definition of sale price, cash discount or trade discount is deductible where ordinary trade practice and the contractual position show that the amount is not part of the dealer's receivable price, and the burden lies on the Department to prove otherwise. Railway freight paid by the purchaser is not excluded where the contract is F.O.R. destination and the price is inclusive of freight, because freight then forms part of the consideration even if paid to a third party. The reference court also declined to reopen the revenue authorities' finding that the contracts were made while the goods were situate in the Province, so the sales were treated as having taken place there.

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Issues: (i) Whether the assessee was entitled to exclude cash discount or trade discount from the turnover under the definition of sale price; (ii) whether railway freight paid by the purchaser was liable to be excluded from sale price; (iii) whether the sales in question could be treated as having taken place within the Province on the basis of the finding that the contracts were made while the goods were situate there.

Issue (i): Whether the assessee was entitled to exclude cash discount or trade discount from the turnover under the definition of sale price.

Analysis: The expression "sale price" was construed in the light of the statutory definition, which allows deduction of cash discount according to ordinary trade practice. On the facts as stated by the revenue authorities, the amount in question was not payable to or receivable by the dealer as part of the contractual price. The burden lay on the Department to show that the Board's view was erroneous, and that burden was not discharged.

Conclusion: The deduction for cash discount or trade discount was allowable, in favour of the assessee.

Issue (ii): Whether railway freight paid by the purchaser was liable to be excluded from sale price.

Analysis: The decisive factor was the contract between the parties, not the manner in which the bill was framed. Where the contract was F.O.R. destination and the price was intended to be inclusive of freight, the freight formed part of the consideration payable for the goods. The statutory words "when such cost is separately charged" were held to govern freight, delivery, and installation alike. In taxing statutes, hardship cannot control plain language, and the fact that the freight was paid to a third party did not alter its character under the definition.

Conclusion: Railway freight was not excluded from sale price and was includible in turnover, against the assessee.

Issue (iii): Whether the sales in question could be treated as having taken place within the Province on the basis of the finding that the contracts were made while the goods were situate there.

Analysis: The Court declined to go behind the finding of the sales tax authorities that the contracts were made when the goods were situate in the Province. It held that, in a reference under the Act, it was confined to answering the questions referred on the basis of the findings already recorded and could not order a fresh investigation. The constitutional objections were answered consistently with the earlier view of the Court.

Conclusion: The sales were treated as having taken place within the Province, against the assessee.

Final Conclusion: The reference succeeded only to the limited extent of allowing deduction of cash discount or trade discount, while the objections regarding freight and situs of sale failed.

Ratio Decidendi: In a fiscal statute, the liability and deductions must be determined by the plain words of the enactment and the contractual terms governing the transaction; freight forms part of sale price where the contract is inclusive of freight and the cost is not separately charged, and a reference court cannot reopen findings of fact already recorded by the revenue authorities.

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