9911796707
TMI Blog1975 (12) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The trade discount which has been treated as part of sale price amounts to Rs. 1,03,790.42 for asst. yr. 1969-70 Rs. 3,81,649.75 for asst. yr. 1970-71, and Rs. 2,14,084.82 for asst. yr. 1972-73. The amount is allowed as a deduction from the catalogued sale price in pursuance of a distribution agreement with the appellant has with its distributors. The relevant clause relating to the discount in one of the standard contracts made is as under :-- Discount : XI(a). The company shall allow the distributor the following discounts off the ruling trade price from time to time published by the Company of its products, purchased by him or sold by the Company to his customers at the Distributor's request. PVC water pipes and fittings Upto 30-6-71 From 1-7-71 For sizes from 16 mm upto and including 75 mm 20% 20% For sizes from 90 mm upto and above 10% 20% PVC Electrical conduits and Fittings . . Wavin Standard Electrical conduits 30% 30% General purpose conduits 30% 30% Other Terms : . . Green Pipes & Fittings 20% 20% Cement 10% 20% Lubricant 10% 20% Metals Components/fittings (not of company's manufacture) . . (b) The Company reserved the right to vary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration 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 charge for anything done by the dealer in respect of the goods at the time 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" It may be seen from the definition that the cash discount can be reduced from the sale price when it is in accordance with the prevailing practice. It is not the case of the Revenue that the payment is not in practice. But it is stated that the payment made should be in cash. The AAC also confirmed this view of the assessing authority apparently following the decision of the Madras High Court in India Piston Limited's case reported in 33 STC 472 which however dealt with a case of "bonus discount" based upon sales exceeding agreed targeted figures by grant of rebate, by way of "reserve" to be adjusted against future prices. Since the AAC has confirmed the assessment the appellant is before us. 4. Thiru G.N. Ananthachary, Chartered Accountant, the learned Authorised Representative took us over the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In fact even turnover discounts allowed in pursuance of an agreement prior to the same had been considered to be deductible by the Tribunal on the ground that the agreed sale price itself is not price after turnover discount in T.A. 462/72 dt. 4th March, 1973. The High Court of Madras also confirmed such a view in T.C. 62/72 dt. 11th March, 1974. The view taken here has been taken by us in a number of other cases also. The appellant is entitled to succeed on this ground. 6. In the view we have taken in the preceding paragraph it is not necessary for us to consider the alternative contention put forward by the appellant that the rate of tax should be 3 per cent, on even if taxable; the ground that the appellant had filed C forms though for the net price. It is the appellant's argument that the transaction itself is covered by C form and that the appellant is therefore entitled to the concessional rate. Even if we do not accept the appellant's argument on merits for total exclusion for discount for turnover, we should have found it difficult to reject this alternative claim. Even if we have found that there is some technical lapse in the C form in not covering the gross turnover, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 6 is erroneous. The relevant portion is as under:-- "As regards next disputed with regard to invoice No. 2559 and 2678 amounting to Rs. 7,514 and Rs. 14,807 claimed to be assessable only at 3 per cent. it is found that the total amount of these 2 bills exceeding Rs. 5,000 and the appellant had not produced the purchase order to cover these 2 invoices before the AO. Invoice No. 2559 and 2678 were issued to Dunlop, Calcutta. The order from Dunlop was produced and there was reference to the same order noted in Invoice No. 2678 dt. 27th Feb., 1971 for Rs. 14,807. But in the case of Invoice No. 2559 dt. 27th Feb., 1971, the supply was on 16th Feb., 1971 while the order was dt. 22nd Feb., 1971 and the article purported to have been received on 22nd Feb., 1971 was different and the date of supply was only on 16th Feb., 1971. Even before the appellant had not produced the purchase order to clinch these 2 sales as integrated one. I therefore hold that the AO had rightly assessed on a turnover of Rs. 7,541. at 10 per cent. However the turnover of Rs. 14,807 covered by Invoice No. 2687/27th Feb., 1971 is covered by proper purchase order". In respect of invoice NO. 2678 for an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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