Region-wise buyer classification sustained for depot clearances, so lower declared prices could not be rejected on Uttar Pradesh factory-gate rates.

Depot clearances were treated in law as factory-gate sales, so the approved factory-gate price would ordinarily govern such removals. On the facts, however, buyers in Uttar Pradesh and buyers in West Bengal and Bihar formed different classes, making region-wise classification of buyers justified. The lower prices declared for depot clearances in the other States were therefore referable to a distinct buyer class and could not be rejected merely because a higher Uttar Pradesh factory-gate price had been declared. The price list for depot clearances was accordingly required to be accepted as declared and approved without modification.

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Issues: Whether the price list for clearances to depots in West Bengal and Bihar could be approved at lower prices on the basis of regional classification of buyers, notwithstanding the higher factory-gate prices declared for dealers in U.P.

Analysis: Sales at depots were treated as factory-gate sales in law, and the approved factory-gate price would ordinarily apply to such clearances. However, the buyers in U.P. and the buyers in West Bengal and Bihar constituted different classes, and regionwise classification of buyers was justified on the facts. The lower prices declared for depot clearances in the other States were therefore referable to a distinct class of buyers and could not be rejected merely by applying the higher U.P. factory-gate price.

Conclusion: The price list for depot clearances was required to be accepted as declared and approved without modification, in favour of the assessee.

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