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TMI Blog1975 (10) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e also considered the various records made available before us by both the sides during the hearing of the appeal. 2. The estimated addition in dispute before us involves two specific counts-- (1) An adhoc addition of Rs. 2,000 to cover probable omissions. (2) An addition of Rs. 1901-07 assessable at 9 per cent as first sales of Ponds Powder. 3. The details pertaining to the surprise inspection of the trade location of the appellants on 11th Oct., 1973 are revealing. They established precise positions of clear stock discrepancies. Even presently before us these variations could not be satisfactorily explained. The order advanced defects tend to be support gaining importance. When considered with the overall facts in their entirety, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. The basic contentions of the Authorised Representation pertained to the prevalent general trade practice and the underlying intent of the principal manufactures (i.e.) Chesbrought Ponds Inc. He outlined that the authorities failed to properly appreciate the basic details. Reference was also made to the general practice of "KOSURU" in vogue in normal commercial channels. It was contended that the supply of such free units could also possibly be construed as falling within its scope and meaning of discount in the shape of quantities (i.e.) quantity discounts. He also contended that the basic liability under Tamil Nadu General Sales Tax Act was on turnover and not on quantity. He contended that the entire quantity with the related sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stributors for the relevant jurisdictions agreed to. (b) The appellant in this instant case effected the purchase of the commodity under dispute from Everest Trading Company, 2/53, Bunder Street, Madras-I. These dealers who are regional distributors effected their purchases from manufacturers Chesbrough Inc. Ltd. (c) The sales effected by Chesbrough Inc. Ltd., to Everest Trading Company were the first sales in the State of Tamil Nadu liable to the single point levy under item 51 of the First Schedule read with s. 3(2) of the Tamil Nadu General Sales Tax Act. The manufacturers supplied the specific quantities of free units relatable to the quantities sold to the wholesale distributor. The wholesale distributors Everest Trading Co. in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of goods in the State of Tamil Nadu. It does not seek to levy any tax on quantities or on quantity basis. (b) The definition of "Sale" under s. 2(n) is extracted below. "Sale" with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of business for each or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge". This definition specifies that the transfer of property in goods should be for cash or for deferred payment or for other valuable consideration. (c) Sec. 2(g) defining "dealer" relates it to persons who carries on business for cash or for deferred payment or for commission, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire quantity inclusive of the free supplies. Tacitly it amounts to receiving a consideration which covers the entire quantity supplied including free units. Instead of a cash discount on the entire value the manufactures appear to have resorted to a form of quantity allowances. In effect it results to the receipt of a total consideration indicated in the sale invoice for the entire quantity including free units sold under the cover of the relative sale bill. (b) For instance in Bill 92215/9th Oct., 1973 Everest Trading Co. effected a sale of 4 cases and 32 units for a total of consideration of Rs. 1579-80. This consideration is the cost price for the appellant for the quantity of 4 cases and 32 free units. The sale involved in this i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the exemption on the entire turnover relatable to the quantities including free units. We therefore, find no scope to view that the appellant can be the first seller in respect of the sales relatable to the free units, as the entire related turnover already suffered tax at the entire related turnover already suffered tax at the hands of the previous sellers. (b) As the tax is leviable on turnover and there is no provision either in the Act or Rules to identify them with related quantities, we find no scope for the type of treatment adopted by the authorities. (c) What the manufactures have chosen to do is to sell specific quantities including free units for an agreed consideration. This agreed consideration for the entire involved qua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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