Judgment 1. These revision petitions are directed against the order dated 1.8.2011 passed by the Karnataka Appellant Tribunal holding that charged incurred by the assessee prior to sale from part of the sale price under Section 2(h) of the Central Sales Tax Act (hereinafter referred to as ‘Act’) and thus affirming the order passed by the lower Authorities. 2. The assessee is a Multi State Co-operative Society registered under Karnataka Value Added Tax, 2003 as well as the Act. The assessee carries on business for purchase of arecanut directly from agriculturist - growers and though commission agents and sale of the arecanut within the State, inter - State trade or commerce and outside the State of stick transfers to own depots and consignment dispatches to agents located outside the State. 3. The substantial question of law, which arises for consideration in these revision petitions, is as under: Whether the charges incurred in removing arecanut from the godown filled up in the gunny bags, the cost of gunny bags, stitching charges by jute twine and transportation charges incurred to the pickup points of the transporter or to the railway station fall within the definition of sale price as defined under Section 2(h) of the Act or that forms part of cost of delivery. 4. In the impugned order, the Tribunal has extracted paras 3 and 4 of the appeal memorandum where the assessee has set out clearly what they mean by words handling charges. In other words, how the goods are handled before it is delivered to the purchasers. The said paras 3-4 read as under: “3. The appellant submits that once the orders received from the selling representatives are accepted and confirmed, the appellant executes the orders by the following modus operandi: The required quantity, variety and grade of arecanut is removed from the godown. The arecanut is filled into single or double gunny bags as per instructions of the purchasers conveyed by the selling representatives and are packaged into bages each containing 60 Kgs. The packages are duly stitched by jute twine. Arecanut contained in the gunny bags are thereafter transported to the pick-up points of the transporter or the railway station for onward transport to the destinations of the purchasers by goods vehicle by road or by railways as the case may be. 4. The packages are duly stitched by jute twine. Arecanut contained in the gunny bags are thereafter transported to the pick-up points of the transporter or the railway station for onward transport to the destinations of the purchasers by goods vehicle by road or by railways as the case may be. 4. Thus the appellant submits that in respect of arecaunt sold in the course of inter-State trade or commerce, expenditures are incurred for handling of arecanut which is for removal from the godown, for filling into gunny bags and stitching of the gunny bags and towards cost of single gunny bags/double gunny bag. Accordingly, the tax invoices raised for inter-State sales, the appellant billed the customers separate charges, inter alia, under description of “handling charges at 2%” of the sale price and “charges for packing at the rate of Rs.60 per bag”. Such charges separately preferred in the tax invoice for the inter-State sales effect.” 5. The contention is that the assessee before delivery of goods filled the arecanut in the gunny bag and duly stitched them by jute twine and therefore handling charges claimed in the invoice in effect is nothing but delivery charges, which is exempted from definition of sale price. In fact, it is separately shown in the invoice and therefore it is contended that handling charges of 2% would not be part of sale price and it is not exigible to tax. 6. In order to appreciate this contention, we have carefully looked at the definition of sale price as contained in Section 2(h) of the Act. It reads as under: “2(h) “Sale price” means 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 cases where such cost is separately charged.” 7. A reading of the aforesaid provision makes it clear that sale price means the amount payable to a dealer as consideration for the sale of any goods. A reading of the aforesaid provision makes it clear that sale price means the amount payable to a dealer as consideration for the sale of any goods. However, the amounts, which are deductible out of the sale price are (a) cash discount, (b) cost of price, (c) cost of delivery and (d) cost of installation. In cases where such cost is separately charged, excluding the aforesaid cost, the sale price includes any sum charged for anything done by the dealer in respect to the goods at the time of or before delivery thereof. 8. The learned counsel for the petitioner relied on the judgment of Madhya Pradesh High Court in the case of Commissioner of Sales Tax, M.P. vs. Flour and Flood Limited reported in [2006] 148 STC 344 (MP) where it was held that a sum charged on amount what is called ‘hammali’ is in the nature of cost of delivery of goods like coolie charges as it is not part of sale price. Even though the said amount charged separately is also shown in the separate bill by the dealer. The Madhya Pradesh High Court also held that the charges were in the nature of cost of delivery of goods like coolie charges and hence had to be deductible from the sale price. In otherwords, cost of delivery charges if separately recovered do not from part of sale price and fall in the excluded category of sale price as defined in Section 2(h). Therefore, it is clear that hammali charges were held to be part of cost of delivery charges. Admittedly, delivery charges cannot be included in the sale price. Therefore, though hammali charge were separately shown in the bill as it was a part of cost of delivery charges, the same is excluded in the sale price. 9. In the instant case, the word used ‘handling charges’ has been explained by the assessee. When once the orders are received from selling representatives is accepted and confirmed, the assessee removes the required quantity, variety and grade of arecanut from the godown. The arecanut is filled into single or double gunny bags as per instructions of the purchasers conveyed by the selling representatives and are packaged into bags each containing 60 Kgs. The packages are duly stitched by jute twine. The arecanut is filled into single or double gunny bags as per instructions of the purchasers conveyed by the selling representatives and are packaged into bags each containing 60 Kgs. The packages are duly stitched by jute twine. Arecanut contained in the gunny bags are thereafter transported to the pick up points of the transporter or to the railway station for onward transport to the destinations of the purchasers by goods vehicle road or by railway as the case may be. Therefore the assessee dose not take responsibility of delivering the goods at the door step of the purchaser. The contract is to transport the goods to the pickup points of the transporter or to the railway station. Therefore there is no obligation on the part of the assessee to deliver the goods to the purchasers at their door steps and in otherwords, their obligation ceases once the goods are transported to the pick up points or to the railway station. Therefore, the delivery is taken by the purchaser through the transporting agency. In similar circumstances, the Apex Court in the case of Commissioner of Sales Tax, U.P. vs. Rai Bharat Das & Bros. reported in STC [vol. 71 1988] page 277 held as under: “Reversing the judgment of the High Court, that in view of the finding recorded by the Tribunal that there was a contract for packing the silica sand in sound gunny bags, the packing charges realised by the respondent was an integral part of the sale price falling within “any sum charged for anything done by the dealer in respect of the goods” as contemplated by section 2(h) of the Central Sale Tax Act, 1956, and were exigible to sales tax under that Act.” 10. In the said case, the assessee was carrying on the business of mining and sale of silica sand, whereas a contract for packing the silica sand in gunny bags and packing charges had been realised on the basis of metric tonnes through these were separately shown and were added up with the price of silica sand and the total sales tax was charged. Therefore, in our view, the definition clause emphatically states that anything which was an integral part included in any sum charged for anything done by the dealer in respect to the goods may from part of sale price under Section 2(h) of the Act. Therefore, in our view, the definition clause emphatically states that anything which was an integral part included in any sum charged for anything done by the dealer in respect to the goods may from part of sale price under Section 2(h) of the Act. In otherwords, any such act done by the assessee in order to put the goods in deliverable state and incidental to the same fall within the definition of Section 2(h) of the Act. When goods are packed in gunny at the time of or before delivery, the expenditure incurred for such packing and making goods to reach deliverable state from part of sale price. In that view of the matter, in the instant case, arecanut cannot be sold as it is stocked in the godown. After the order is confirmed according to the specification of the purchaser, arecanut is removed from the godown and then according to his requirement it is filled into single or double gunny bags and then stitched by jute twine and transported to pickup points to the transporters or to the railway station. All these acts are necessary to make goods to reach a deliverable state and the goods are sold. The title of goods passes when it is delivered to the transporter either at the pickup points or at the railway station. Therefore, three authorities have rightly held that the handling charges and packing charges do not constitute cost of delivery on the contrary it forms part of sale price. In that view of the matter. We do not see any merit in these petitions. Accordingly, the revision petitions are dismissed.