TMI Blog2009 (11) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... erest due thereon. We therefore direct the respondents to recall the orders in the case of such of the appellants/petitioners who concede liability in terms of the judgment and who remit balance tax if any along with applicable rate of interest within three weeks from the date of receipt of a copy of this judgment. - W.A. Nos. 1565,1566, 1567,1572,1573 of 2006 & Others - - - Dated:- 30-11-2009 - RAMACHANDRAN NAIR C.N. AND MOHANAN V.K. , JJ. The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J. The question raised in the connected writ petitions and writ appeals is whether the appellants/petitioners are entitled to exemption from tax payable under the Value Added Tax Act, 2003, hereinafter called the Act on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005. The charging section, namely, section 6(1) of the Act provides for levy of tax on the taxable turnover. Taxable turnover under section 2(l) means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed. Turnover as defined under section 2(lii) and clause (ii) of Explanation III to section 2(lii) provides for exclusion of discount in the computation of turnover. The said clause of Explanation III providing for deduction of discount as originally contained in the statute is as follows: (ii) Any cash discount on the price allowed in respect of any sale where such cash discount is shown separately or any amount refunded in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessees. Before proceeding to consider the case on the merits, we have to consider the distinction between the scheme of tax on sale of goods both under the VAT regime and under the Sales Tax Act existing prior to that. Under the Sales Tax Act except a few items, all other goods were taxable at the point of first sale in the State. Therefore tax was levied and collected only from the first seller. Contrary to this, the scheme under the VAT regime is that the tax collected by the first seller is given as input tax credit to the second seller, and the tax paid by the second seller is given as input tax credit to the third seller and ultimately the entire tax is borne by the ultimate consumer. In other words, the tax paid on the value ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed to consider the case with reference to the statutory provisions. The contention of the assessees that discount is allowable irrespective of the time and manner in which the seller gives it to the purchaser does not find a place in the statute. On the other hand, the provision of deduction of eligible discount is specifically covered by clause (ii) of Explanation III to the definition of turnover . Going by the main clause in the definition, namely, turnover, it is clear that the tax is on the actual sale price. The Explanation specifically clarifies that any discount on the price allowed in respect of any sale if shown separately has to be excluded. Admittedly under the original provision and in the amended provision, eligibility f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the discount amount after the seller grants it as reduction in the tax invoice itself. The original provision did not contemplate the buyer paying the discount amount along with price or in other words, payment is always net of the discount. Therefore in our view the additions made to Explanation III(ii) to section 2(l) through amendment with retrospective effect does not convey any new meaning and content to the original provision to which only further clarification is made to avoid unnecessary controversy and litigation. Since we have already found that the amendment has not brought out about any new provision or condition for allowing discount and is only a meticulous clarification of the original provision, there is no need for going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, or any other form of discount, such discount should be shown in the tax invoice separately and the sale price along with tax thereon should be collected from the buyer without including the discount granted. Since the conditions for deduction of discount from taxable turnover are mandatory, the appellants/petitioners have no escape from liability to pay tax on the original sale price on which they have in fact collected sales tax and remitted the same. The present attempt to get refund of tax paid based on the discount allowed through credit notes in our view is not tenable and is not permissible under the Act. For the foregoing reasons, we confirm the judgment of the learned single judge upholding the disallowance and demand of tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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