P. Subramonion Poti, J.
1. In view of the difficult but interesting questions that arise for determination in this Original Petition this case has been referred by a Division Bench for decision by the Full Bench. Section 4 of the Central Excises and Salt Act, 1944 as it stood at the relevant time provided that where any article is chargeable with duty at a rate dependent on the value of such article such value shall be deemed to be the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty. It may happen, as it has happened in the case before us, that sale in wholesale of substantial part of the goods produced may be effected to a customer at a price much less than the price at which the goods are sold to other customers in the usual course of business. That may be for reasons such as that such customer is a standing customer, who takes the bulk of the production or that a long standing agreement is in force in regard to supply to such customer. There may be no extra commercial considerations in effecting the sales to such custo- mer at a lower price. Could it be said that the wholesale price in respect of such sales should be based on the price at which goods were sold to such customer or should the higher price at which the goods were sold to other customers be the basis for determining the duty Had the case arisen for decision under Section 4, as it now stands substituted by Central Act 22 of 1973, which conceives of such a situation it would not have been difficult to decide it. The provision envisages taking into account the different normal prices at which the goods are sold in wholesale trade. But the said amendment having come into force only on 1-10-1975 that will have no relevance to thc- case before us, as the case relates to claim for duty for sales effected during an earlier period.
2. The petitioner is a Public Limited Company, the Travancore Electro- Chemical Industries Limited, Chingavanam. The petitioner company manufactures Calcium Carbide in its factory at Chingavanam. The sales by the company are said to be effected on a wholesale basis to different purchasers and the goods are delivered at and removed from the factory. It is averred by the petitioner that it is the normal practice of the wholesale trade in Calcium Carbide produced in the factory to effect sales of Calcium Carbide even of the same sizes at different prices to different classes of buyers. But these different prices are charged not on account of any extracommercial factors nor on account of any relation of the buyers to the petitioner company. There is said to be no understatement in any of the invoices or in the agreement entered into by the petitioner with any of the purchasers. For the past many years the major buyer of Calcium Carbide from the petitioner company was M/s. Indian Oxygen Limited, an Industrial Consumer of that product. With Indian Oxygen Limited the petitioner had entered into written agreements from time to time concerning the price and other terms of sale. Taking into account the large quantity of the bulk purchases regularly made by Indian Oxygen Limited, the article is sold to them under the agreement at a price lower than the price realised from most of the other buyers for Calcium Carbide of the same size, namely 4-80 rnm. We may state here that the Department of Central Excise has also no case that the price to M/s. Indian Oxygen Limited is understated in the invoices or that the sales are effected to them at a lower price on account of any extracommercial considerations.
3. Calcium carbide was subjected to excise duty from 1970. Ever since that time the petitioner is said to be submitting regularly the price lists of various sizes of Calcium Carbide to be sold to the buyers, as required by Rule 173-C of the Central Excise Rules. The price list would show the prices for the different sizes such as 50-80 mm, 25-80 mm, 4-80 mm. It is further mentioned that in the price lists different prices may be; declared for the same size of Calcium Carbide as well. On the basis of such prices mentioned in the price list goods were said to have been sold by the petitioner. The excise duty was said to be charged on the goods sold only on the basis of the price lists approved by the proper officer.
4. on 28-6-1972, the Superintendent of Central Excise, Kottayam issued a show cause notice (copy of which is Ext. P 1) to the petitioner pointing out that there was short levy of excise duty in regard to 13918.6O5 metric tonnes of Calcium Carbide or various sizes as detailed in the work sheet attached thereto. The short levy according to the notice came to Rs. 251,684.85. This concerned the Calcium Carbide cleared from the factory between 1-3-1970 and 31-5-1972. Evidently the stand taken in Ext. PI was that it was not the price shown in the price lists that had to be adopted for assessment to duty but the highest price shown for each category of the goods mentioned in the price lists. Another similar notice, copy of which is Ext. P2, was issued to the petitioners claiming similar duty for a different period 1-6-1972 to 15-9-1972. This concerned the short levy of excise duty on 896.600 metric tonnes of calcium carbide and the short levy amounted to Rs. 19773.25. Though the proposals were objected to, the objections were overruled and Exts. P3 and P4 orders were passed by the first respondent, the Assistant Collector of Central Excise, Kottayam, holding that the petitioner was liable to make good the short levy as proposed in the notices. The petitioner took up this in appeals before the Appellate Collector of Central Excise, Madras as appeals 132 and 831 of 1973 respectively. By a common order these appeals were substantially dismissed. We say substantially because the Appellate Collector recognised that Rule 10 of the Central Excise Rules would apply to such short levy and the period of limitation being one year the demands pertaining to the period more than one year prior to the date of demand were found to be barred by limitation. This concerned the demand under Ext. PI notice only. To that extent the petitioner succeeded. But on the main contention the petitioner failed. It was held by the Appellate Collector that a wholesale market for Calcium Carbide existed at the Factory gate and therefore the Assistant Collector was not in error in not taking into consideration sales at rate contracts at lower prices.
5. The petitioner filed a revision against the order of the Appellate Collector to the Government of India, the 3rd respondent in this petition By that time the Supreme Court had rendered the decision in A.K. Rov v. Voltas Ltd. (A.I.R. 1973 S.C. j.25). It was contended by the Revision Petitioner before the Government that judged by the definition of the term 'wholesale cash price' as explained in that decision the proposal to levy duty on the sales to Indian Oxygen Limited at a higher rate was not justifiable. The revision petition was dismissed by Ext. P7 order on 31-7-1975, the Government of India holding that when different rates are charged in wholesale transactions at the factory gate, even if about 60% is sold to M/s. Indian Oxygen Limited and balance alone is sold to other customers, it has to be found that the poods are capable of being sold at the highest rate charged from an independent wholesale dealer. Following that a demand notice Ext. P8 was issued on the petitioner for payment of the amount of short levy. In the original petition attack is made to Exts. P3, P4, P5 and P7.
6. Towards the close of the hearing of the case before the Full Bench a supplementary affidavit has been filed by the petitioner. Many of the averments are of facts not hitherto disclosed in these proceedings. According to the petitioner's counsel this supplementary affidavit has to be looked into to enable a proper approach to be made to the case. A petition is also filed to accept the supplementary affidavit as well as the additional documents. We have by separate orders dismissed those petitions. We will concern ourselves with the points argued by counsel on both sides on the pleadings before the Court.
7. The genuineness of the sale price realised by the petitioner from M/s. Indian Oxygsn Limited to whom nearly 60% of the Calcium Carbide produced by the petitioner company is sold is not in controversy. Possibly because the said customer had been purchasing the goods for long and was one of tbe main customers of the petitioner purchasing in bulk, favourable terms had been offered to them. It is not the case of either side that the sales effected at wholesale cash prices to others were not genuine prices. There is no case that the prices were inflated. Therefore we have to deal with a situation where, in the usual course of business, nearly 60% of the goods produced have been sold at a lower price to one of the petitioner's customers, viz., M/s. Indian Oxygen Limited. Section 4 of the Central Excises and Salt Act, 1944, as it stood at the relevant time, read thus :
'4. Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be--
(a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or
(b) where such price is not ascertainable, the price at which an article of of the like kind and quality is sold or is capable of being sold by manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto.
Explanation.-In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid.'
The section as it now stands substituted is materially different and that Section reads thus:
''Section 4. Valuation of exisahle goods for purposes of charging of duty of excise.-(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this Section, be deemed to be-
(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale :
(i) where in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in Clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers ;
(ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in Clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof ;
(iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail ;
(b) where the normal price of such goods is not ascertainable tor the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed.
(2) Where, in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price.
(3) The provisions of this Section shall not apply in respect of any excisable goods for which a tariff value has been fixed under Sub-section (2) of Section 3.
(4) For the purposes of this section
(a) 'assessee' means the person who is liable to pay the duty of excise under this Act and includes his agent ;
(b) 'place of removal' means-
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises ''wherein the excisable goods have been permitted to be deposited without payment of duty;
from where such goods are removed;
(c) 'related persons' means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other-and includes a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub- distributor of each distributor.
Explanation.-ln this clause 'holding company', 'subsidiary company' and 'relative' have the same meanings as in the Companies Act, 1956;
(d) 'value' in relation to any excisable goods,-
(i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is to a durable nature and is returnable by the buyer to the assessee. Explanation.-In this Sub-clause 'packing' means wrapper, container, hobbin, pirn, spool, reel or wrap, beam or any other thing in which or on which the excisable goods are wrapped, contained or wound ;
(ii) does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale; (e) ''wholesale trade' means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail.
5. Remission of duty on goods found deficient in quantity.-
(1)The Central Government may, by rules made under this Section, provide for remission of duty of excise leviable on any excisable goods which due to any natural causes are found to be deficient in quantity.
(2) Any rules made under Sub-section (1) may, having regard to the nature of the excisable goods or of processing or of curing thereof, the period of their shortage or transit and other relevant considerations fix the limit or limits of percentage beyond which no such remission shall be allowed :
Provided that different limit or limits of percentage may be fixed for different varieties of the same excisable goods or for different areas or 'for different seasons.'
It is evident from the Section as it now stands that Parliament recognises the normal practice of different prices being charged in sales made in wholesale trade even when there are no extra commercial considerations. It is also apparent that if the case were to be decided under the provision now in force it would have been easy, for, the duty will then have to be levied at the different normal prices. Even though lower prices are charged for the goods sold to M/s. Indian Oxygen the duty on such goods would have been only that based on the normal price of sales to them. Whereas Section 4 as it stood earlier related the duty to the wholesale cash price the duty under the new provision is related to the norm il price which is the price at which goods are ordinarily sold in the course of wholesale trade.
8. According to Sri. T.R. Govinda Warrier, learned Central Government Pleader, there is no scope for assuming that there may be two different wholesale prices of goods of similar kind and quality at any given point of time and Section 4 as it then stood having envisaged only one wholesale cash price that must be taken hot as the price at which the identical goods are sold in the usual course of business but that of goods of a similar kind and quality and if so it is not the price at which goods were sold to M/s. Indian Oxygen that should be relevant to determine the duty leviable on such goods but the price at which goods of the same kind and quality were sold to others. That being a higher price such higher price should be adopted as wholesale price. Even otherwise, according to the learned Central Government Pleader, when the goods are capable of being sold in the wholesale market at the higher price which had actually been realised from other wholesale dealers the wholesale price cannot be the concessional price agreed upon but the price at which goods are capable of being normally sold in the wholesale market. In that view it is said that the highest price should be the price relevant to determine the wholesale cash price. Alternatively it is contended that S.4 contemplate the determination of wholesale price not with reference to the price at which goods are sold to consumers-even to Industrial consumer-but the price at which sales are effected to wholesale dealers. In other words, wholesale cash prices are not merely cash prices realised when goods are sold even in bulk to consumers but prices realised when sales are effected to wholesale dealers. The points for determination are therefore :
1. When goods which are the subject of levy to excise duty are sold wholesale and there is no extra-commercial element in fixing the sale price in such sales should the assessment to duty be made on the basis of such sales or whether they should be made only on the basis of sale price of .goods of like kind and quality.
2. When evidence establishes that goods of the same quality and kind are sold at different wholesile cash price in the usual course of business should the highest of these be adopted for assessing duty as the price at which the goods are capable of being sold. If not, how is the wholesale cash price to be determined in such a case ?
3. Whether the sales to Indian Oxygen are sales the price realised whereunder represent wholesale cash price within the meaning of that term as used in Section 4 of the Act as it stood prior to amendment by Act 22 of 1973 ?
9. To appreciate the argument of counsel Sri. Warrier on the first point it is necessary to elaborate a little more. According to Sri. Warrier, if a portion of the sales is to customer 'A' at price 'X' and the rest of the sales is to customer 'B' at price 'Y' and both sales are genuine sales effected on commercial considerations only, the wholesale cash price for the sales to 'A' (made at price 'X') would not be the price realised by such sales themselves, but the price realised by the sale to 'B' (i.e.) (price 'Y'). That is said to be because when 'A' sells part of the goods the wholesale cash price for the purpose of assessment to duty would be the price for which an article of the 'like kind and quality' is sold and not the wholesale price in respect of the identical goods. The sale to 'B' being of the article of like kind and quality the wholesale cash price 'Y' of the goods sold to 'B' should be adopted as wholesale cash price of the goods sold by 'A' though the goods are sold at price 'X'. To apply that to the facts of the case would mean that irrespective of the price at which about 60 per cent of the goods produced were sold to M/s. Indian Oxygen the wholesale cash price in regard to such sales must be determined on the basis of the wholesale cash price realised in the sales to other dealers. Of course by the same logic it may have to follow that the wholesale cash price in regard to the sales to the other dealers must depend upon the price in respect of sales to M/s. Indian Oxygen which is a lower price. But according to Sri Warner that may not be relevant here because the challenge here is only to the enhancement in respect of the duty .originally assessed in respect of goods sold to M/s. Indian Oxygen and there was no plea by the petitioner at any time that there had been an over assessment of duty in regard to sales to other dealers. Consequently there was no application for refund a'so.
10. The scheme of Section 4 indicates that (the reference is to the Section as it stood at the relevant time except where so specifically refer to the new Section) the duty chargeable is dependent on the value of the article. Such value is to be deemed to be either that mentioned in Clause (a) or that in Clause (b) of Section 4. Sub-clause (b) applies only when wholesale cash price is not ascertainable. Therefore the application of Section 4(a) is necessarily to cases where the price is ascertainable. Section 4(a) refers to 'wholesale cash price' for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory for delivery at the place of manufacture or production. Construing this Section, in Voltas case (A.I.R. 1973 S.C.325) the Supreme Court had laid down the rule that for a wholesale market to exist, it is not necessary that there should be a market in the physical sense of the term where articles of a like kind or quality are or could be sold or that the articles should be hold to socalled independent buyers. The reference is to the potentiality of the article being sold on a wholesale basis. Therefore reference to cases where goods of like kind and quality 'is sold' in S.4 (a) is to cases where such sales are actually effected at the place of manufacture. Where such sales are effected elsewhere the price at which such article is 'capable of being' sold at the place of manufacture or production could be determined. In addition to-the manufacturing cost and manufacturing profit there would be the element of expenses incurred such as in transporting the goods for sale at places other than the manufacturing premises. Though the sales of goods of like kind and quality are at places different from the premises of manufacture or production the wholesale cash price at the latter premises is capable of being estimated by making necessary allowance for postmanufacturing expenses. The scheme of the Central Excises and Salt Act envisages assessment to duty even before sales are effected and naturally therefore the determination of the quantum of duty cannot normally or universally be on the basis of the wholesale cash price realised at sales of the identical goods on which duty is imposed. Therefore the Section envisages determination of the wholesale cash price on the basis of sales of goods of'like kind and quality'. This does not necessarily rule out determination of the wholesale cash price .on the basis of the price at which identical goods are sold. We feel we are supported in the view by the observation of Sir George Rankin in Ford Motor Company v. Secy. of State-A.I.R. 1938 P.C. 15. Section 30 of the Sea Customs Act, .1878 corresponded materially to Section 4 of the Central Excises and Salt Act as it stood prior to amendment. Import duty leviable under that Act took into account the importer's price and the importer's profit but not -most of postimport operations. Sub-section (b) of Section 30 applied to cases where the price was not ascertainable. It was ascertainable where goods of like kind and quality were sold at the time and place of importation (or exportation) or such goods were capable of being sold at the time and place of importation.Ford Motor cars, imported by the appellant company in that case, against orders placed by its customers Were being supplied to the dealers in India and the wholesale cash price to be determined in regard to such Ford Motor cars for the purpose of assessment to duty called for determination in that case. It was said that all the sales were sales against orders previously taken and there was no price current as in the case of staple articles for which one could determine the price on the basis of daily publication of the price lists in newspapers. Since such cars would not be available generally for wholesale purchase in view of the supply being made normally only against orders it was contended by the appellant in that case that the price of'like kind and quality'of goods would not be ascertainablc and so the assessment must be made under Clause (b) of Section 30 of the Sea Customs Act. Dealing with this contention the Privy Council observed at page 19 thus :
'The price upon which customs duty has been charged appears therefore to be a wholesale cash price, less trade discount, for which the goods under assessment were in fact sold at the time and place of importation. On this footing their Lordships must now consider the more general arguments for the appellants against the application of Cl. (a) to the shipment in question. 'Goods of the like kind and quality' is a phrase which suggests other goods than those under assessment. Upon this is based the argument 'hat one must either disregard the price fetched by the goods themselves or should look to it only to see what price other similar goods would have realised. Unless that is ascertainable, it is contended, that the conditions of Cl. (a) are not satisfied. If, for example, one may assume that there were in Bombay no Ford Motor A vehicles left undisposed of from previous shipments, then on this view the correct test is to ask one' self whether, apart from and in addition to those which arrived by the s.e. 'ALGIC', further cars could have been sold in Bombay on or about 9th January, 1929, and, if so, would they have fetched the same prices? If this be the true interpretation of the statutory test, there is difficulty in holding it applicable to the present case, and colour is certainly lent to the contention that Cl. (a) is intended only to have effect in the case of goods for which there is at the place of importation as market in the strict sense applicable only to staple commodities. But, in their Lordships' view, this is a misinterpretation of Cl. (a). The application of the clause does not depend upon any hypothesis to the effect that at the time and place of importation an indefinite amount of further goods added to the available supply has had effect upon the wholesale price. Ordinarily at the time of marking out the bill of entry there will not be an actual price relating to the goods themselves and complying with the requirements of Cl. (a) As a rule, therefore, the price appropriate to the goods under assessment will under the clause be deduced, if at all, from actual prices relating to other goods of like kind and quality. But if there is an actual price for the goods themselves at the time and place of importation and if it is a 'wholesale cash price less trade discount', the clause is not inapplicable for want of sales of other goods. The clause can be applied distributively to each of the motor cars in this consignment and even if they are regarded collectively the clause is not defeated. A particular car may be sold at a price which, having regard to other transactions in such cars to other circumstances, is too high or too low. In that sense the actual price in particular instance does not necessarily or finally establish a wholesale price to satisfy Cl. (a) whether the particular car or cars sold be part of the shipment in question or not. But the goods under assessment may under Cl. (a) be considered as members of their own class even although at the time and place of importation there are no other members. The price obtained for them may correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation'.
The following observations of the Supreme Court in Voltas' case may be pertinent in this context:
'We also think that the application of Cl. (a) of Section 4 of the Act does not depend upon any hypothesis to the effect that at the time and place of sale, any further articles of like kind and quality should have been sold. If there is an actual price for the goods themselves at the time and place of sale and if that is a 'wholesale cash price', the clause is not inapplicable for want of sale of other goods of a like kind and quality.'
The reasoning applies to the case before us. The contention that wholesale cash price shall not be determined on the basis of the price at which the goods subjected to duty are sold or are capable of being sold and that must necessarily depend only upon the price of other goods of like kind and quality docs not therefore appeal to us.
11. We now come to a more difficult question. How the wholesale cash price is to be determined when the goods produced are sold at different prices and there are no extracommercial considerations in such sales is not easy to answer. The Supreme Court in Voltas case dealt with a situation where only a small portion of the goods were sold by the manufacturer at wholesale cash price and the excise authorities were not .prepared to accept such wholesale cash price as the price at which the entire goods were to be assscssed to duty. The Supreme Court expressed the view that once wholesale dealings at arms length were established, the determination of the wholesale cash price for the purpose of Section 4(a) of the Act may not depend upon the number of such wholesale dealings.
12. We have therefore to resolve in this case whether then; can be two wholesale prices within the meaning of Section 4(a) before its amendment and if not which one of the two genuine prices has to be taken into account as the wholesale cash price. The observations in Voltas case indicate that once agreement between the Indian Oxygen and the petitioner company is shown to be one reached in the usual course of business and at arms length there is no reason to reject it as being not the wholesale cash price. In fact, had there been no sales in wholesale to other dealers at all and the rest of the sales had all been to retailers there would have been no scope for the controversy that has now arisen. The rule in Voltas c'ase would evidently have been applicable in that case. But that is not the situation here. It may not be easy to say that there are two wholesale cash prices in regard to 'goods of similar kind and quality'. Whether the wholesale cash price is the price at which sales were effecte 1 to M/s. Indian Oxygen or the price at which sales were made to other dealers or a third one, to be determined taking into to account these and other circumstances is the question that calls for an answer. It may be that the price at which goods are sold in the usual course of business in wholesale to one dealer may include, besides manufacturing cost and manufacturing profit an element of further profit also. That may explain a higher price in a transaction. It may also equally well be that in the sales effected to a standing customer under a standing contract the wholesale cash price realised is not sufficient to cover the manufacturing cost and manufacturing profit. That is a distinct possibility. Therefore a conflict such as the one before us may call for determination of the manufacturing cost and manufacturing profit and the wholesale cash price may have to be determined on that basis. May be that proceedings under Article 226 of the Constitution are not appropriate for such determination. The question is complex and as we have indicated not easy to resolve. Since we propose to dispose of the petition before us on the last of the points urged by the learned Central Government Pleader by way of answer to the petitioner's case,we are leaving this difficult question open.
13. M/s. Indian Oxygen is an industrial consumer and it is not purchasing calcium carbide for the purpose of resale but for its own consumption. The sales to Indian Oxygen is in bulk and if price realised at such bulk sales could be called wholesale price that would be wholesale cash price too since the sales are on cash terms. If on the other hand, the wholesale cash price refers to price at sales to wholesale dealers or sale in wholesale to dealers who purchase the goods for the purpose of trade the price at which goods are sold to Indian Oxygen would be irrelevant. Therefore we are called upon to consider the meaning of the term 'wholesale cash price' in Section 4(a) of the Act. For the present we can leave out the terms 'cash'. We are really concerned with the determination of 'wholesale price', for, the term cash indicates that considerations of credit for payment of the purchase money may take a difference in the price The question posed is: can it be said that the wholesale price is the price real sed by sales in bulk even to customers who do not deal in the goods but consume them ?
14. The new Webster's Dictionary defines 'Wholesale' as 'The sale of commodities in large quantities, and especially for the purpose of resale, as to retailers or jobbers rather than to consumers directly'. Black's Law Distionary defines 'wholesale' as 'Selling to retailers or jobbers rather than to consumers; a sale in large quantity to one who intends to resell; a sale of goods by the piece or in large quantities.'
15. A Division Bench of the Bombay High Court in Secy. of State v. Vaccuum Oil Co-, A. I. R. 1930 Bom. 597 understood the term 'wholesale' in Section 30 of the Sea Customs Act, 1878 as a term used in contradistinction to the expression 'retail'. Beaumont C.J. said in that case thus:
'The wholesale dealer is the man who supplies the dealer at one price and the dealer supplies the public retail at a higher price sufficient of course, to cover his own overhead charges and profit. But I am not prepared to say that the introduction of a middleman is an essential ingredient to the expressions 'wholesale price' or 'wholesale dealing'. The word 'wholesale' from an etymological point of view, and according to the definition in Murray's Dictionary, means primarily a sale in large quantities, and I think that where a trader sells the whole, or a very large part of his produce direct at a fixed price to customers that price is properly described as the 'wholesale price'.
This case is seen to have gone up in appeal to the Privy Council and the decision is reported in Vaccuum Oil Co. v. Secy. of State, A.I.R. 1932 PC. 168 (the report wrongly notices that the case is from Bombay; A.I.R. 1922 Bom. 12). The Privy Council did not agree with the view taken by the Bombay High Court. In Section 30 the term 'wholesale' is seen used in conjunction with the words 'trade discount' and 'cash price'. The Privy Council noticed that Beaumont C.J. had not availed himself, as an aid to construction, of the light thrown upon eash of the expressions by the presence within it of the others. The Privy Council also noticed that in the construction of the words by the High Court hardly sufficient regard had been paid to the setting in which the terms are found. The Privy Council observed thus :
'Sections 29 and 30 are sections of a taxing Act not to be pressed against the tax payer beyond their plain intendment, and taken as a whole, as their Lordships read them, they seem to disclose on the part of the legislature when describing the price which is to represent the 'real value' of the goods to be taxed a definite purpose to define a price-conservative in its every aspect and free in particular from any loading for any post importation charges incurred in relation to the goods. The price is to be a price for goods, as they are both at the 'time' and 'place' of importation. It is to be a 'cash price' that is to say, a price free from any augmentation for credit or other advantage allowed to a buyer; it is to be a net price, that is to say, it is a price 'less trade discount'. And this last expression, supplemented by these other indications confirms in their Lordships' view the conclusion that the words 'wholesale...price' are used in the section in contradistinction to a 'retail price' and that not only on the ground that such is a wellrecognised meaning of the words but because their association with the words 'trade discount' indicates that sales to the trade are those in contemplation, and also because only by attaching that meaning to the word is the 'wholesale' price relieved of the loading repre- senting the post importation expenses, which, as a matter of business, must aiways be charged to the consumer, and which in the other words of the section already alluded to, are so carefully eliminated. If the question of construction had to be determined solely by reason of the presence of the word 'cash' in the definition their Lordships would have been in agreement with the Chief Justice. But that is by no means the case.'
The Privy Council dealt with a case of construction of Section 30 of the Sea Customs Act. The construction of the term 'wholesale' in the Privy Council case is noticed by the Supreme Court at paragraph 20 of the judgment in Voltas case while construing the scope of Section 4(a) of the Central Excises and Salt Act as it stood prior to the amendment.
16. There is no doubt difference in the language of Section 30 of the Sea Customs Act and Section 4(a) of the Central Excises and Salt Act. In the Sea Customs Act the term 'wholesale' is found is association with cash price and trade discount, and this association lends colour to the construction of the expression 'wholesale'. The term cash price is associated with wholesale in Section 4 of the Central Excises and Salt Act also. The provision for deduction in respect of trade discount is made not in the body of Section 4 but in the Explanation. Despite the difference between the two provisions there is no material difference in the concept. Wholesale cash price envisages a deduction in respect of trade discount for the purpose of assessment of value of the article under Section 4 of the Act. Such trade discount is an incident normal in all sales to dealers. The term 'wholesale dealer' is defined in the Central Excises and Salt Act in Section 2(k) and that refers to a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture. What was contemplated by Section 4(a) of the Act as it stood at the relevant time was not sale to consumers in bulk but sale to the trading community in wholesale.
17. The scheme of S. 4(a) of the Act as amended may not be of any assistance in the interpretation of the term wholesale occurring in Section 4(a) of the Act prior to the amendment since the scheme of Section 4(a) is different from the old scheme and was evidently envisaged to meet the situation arising out of the decision in Voltas case.
18. We are therefore unable to hold on the facts that the price at which goods were sold to M/s. Indian Oxygen was a 'wholesale cash price'. There is no specific attack to the orders under challenge in the petition on any plea that the sales, the wholesale cash price in respect of which is adopted for the purpose of making up the short levy are not sales to wholesale dealers. Therefore though that was urged at the hearing as a last resort we do not think we would.be justified in going into that question in this proceeding under Article 226 of the Constitution. Since we find that the petitioner should fail in his plea that duty should have been determined on the basis of wholesale cash price at which sales were made to M/s. Indian Oxygen, we hold that the petition has to be dismissed.
In the result, tbe Original Petition is dismissed. But in the circumstances of the case we direct parties to suffer costs.