G.G. Sohani, J.
1. By this reference Uder Section 44 of the M.P. General Sales Tax Act, 1958, hereinafter referred to as the Act, the following question of law has been referred to this Court for its opinion:
Whether bottling charges should be included in the turnover exigible to tax under the M.P. General Sales Tax Act, 1958?
2. The material facts giving rise to this reference briefly are as follows: The assessee was, at the material time, a distillery contractor, who, under a licence granted to him, sold country liquor to licensed retail vendors. The assessment year in question is from 1st October, 1959, to 30th September, 1960. The assessee, while selling liquor to retail vendors under the terms of the licence, charged, in addition to the price of liquor, bottling charges as well, which he was authorised to charge at the rate specified in the licence. The Sales Tax Officer assessed the assessee on a. gross turnover of Rs. 1,64,366. The Additional Commissioner of Sales Tax noticed that bottling charges were not included in the turnover and hence he issued a notice under Section 39(2) of the Act to the assessee calling upon the assessee to explain why assessment should not be enhanced by levying tax on bottling charges. The assessee appeared before the Additional Commissioner and contended that the whole of bottling process done by the assessee was in the nature of works contract and hence bottling charges were not liable to be included in the turnover exigible to tax. This contention, however, was not upheld by the learned Additional Commissioner, who set aside the assessment order and remanded the case for a proper computation of gross and taxable turnovers in accordance with law. Aggrieved by that order, the assessee preferred an appeal before the Tribunal. The contention of the appellant before the Tribunal was that the bottling charges were for the services rendered by the appellant and these charges could not, therefore, be treated as part of the sale price and were not liable to tax under the Act. The Tribunal, relying on its decision reported in Laxminarayan Ramnarayan v. Commissioner of Sales Tax 1969 V.K.N. (2) 146 (TJX), held that, in the light of the terms of the distillery contract entered into by the assessee with the Government, the bottling charges could not be included in the sale price for the purposes of tax. In this view of the matter, the Tribunal set aside the order passed by the Addi-tional Commissioner holding that the bottling charges were not liable to tax. On an application made by the department, the Tribunal has referred the aforesaid question of law to this Court for its opinion.
3. Having heard the learned counsel for the parties, we have come to the conclusion that this reference must be answered in the negative and against the department. In United Excise v. Commissioner of Sales Tax 1971 J.L.J.,489, a Division Bench of this Court considered the nature of the contract similar to the one under consideration before us in this reference and held that the process of bottling the liquor was undertaken on account of compulsion of law and was in the nature of a works contract and could not be said to be necessitated by the contract of sale between the distillery contractor and the retail vendor. In this view of the matter, the Division Bench held that bottling charges were not exigible to tax under the Act. We respectfully agree with the opinion expressed by the Division Bench in that case.
4. Consequently, our answer to the question referred to us is in the negative and against the department. In the circumstances of the case, the parties shall bear their own costs of this reference.