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2009 (3) TMI 956 - HC - VAT and Sales TaxWhether the assessing authority could impose tax on the assessee, a dealer of Tata vehicles, on the value of credit notes issued by the manufacturer, M/s. Tata Motors, for defective parts of cars and other vehicles supplied by the assessee, a dealer of the manufacturer under a warranty agreement between the manufacturer and the ultimate customer to whom such vehicles are sold by the assessee? Held that:- Credit notes received from manufacturer by the assessee-dealer could not be taxed as sale value of spare parts replaced for defective parts under warranty by the manufacturer to the customer, in the present case. Consequently, the Tax Board cannot be said to have committed any error in distinguishing the judgment of Supreme Court in Mohd. Ekram's case [2004 (7) TMI 341 - SUPREME COURT OF INDIA] and finding that in the facts and circumstances of the case, the assessing authority was not justified in imposing tax in the hands of the respondent-assessee. The Tax Board is also justified in upholding the setting aside of interest and penalty because as far as interest is concerned the same is consequential to levy of tax which falls to the ground for the aforesaid reasons and penalty also because same in any case could not have been imposed as all the transactions were duly recorded in the regular books of account and, therefore, the same do not attract any penalty under section 65 of the Act. The question relating to power of assessing authority to invoke section 30 of the Act for reassessment as there was no escapement of turnover is also thus answered in favour of the respondent-assessee and against the Revenue.
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