TMI Blog2014 (9) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... discount by way of credit notes was not dealt with in proper perspective by the assessing authority. The settled principle of trade discount was not at all applied in allowing the discount. It was an apparent mistake on the face of the record. There being glaring irregularity and illegality on the face of the order of reassessment passed by the Assistant Commissioner, it was modified in the order of revision passed by the Senior Joint Commissioner, Commercial Taxes, Corporate Division in suo motu revision Case No. SMR-17/CD/09-10. The Senior Joint Commissioner acted within the ambit of power under section 80 of Act, 1956 and sub-rule (3) of rule 244 and rule 245 of the West Bengal Sales Tax Rules, 1995. The law relating to trade discounts has also been properly discussed. The well reasoned judgment, therefore, does not call for any interference - Decided against assessee. - W.P.T.T. No. 63 of 2011 - - - Dated:- 19-10-2012 - KALYAN JYOTI SENGUPTA ACTG. C.J. AND ASIM KUMAR MONDAL, J. For the Appellant : Joydeep Kar, Anirban Mitra, Souvik Guha and Prasenjit Saha For the Respondents : Abhratosh Majumdar and Soumitra Mukherjee JUDGMENT:- PRANAB KUMAR DEB (Chair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested the authority to refund the admitted excess payment of tax. Impressed by the submissions made by the petitioner, the Assistant Commissioner, Commercial Taxes, Corporate Division, asked it to file indemnity bond for the aforesaid claim of refund. Accordingly, the indemnity bonds were furnished on behalf of M/s. Crompton Greaves. No headway having been made, the petitioner sent another letter addressed to the Commissioner of Commercial Taxes, West Bengal, with a request to issue directions for refund of the excess tax under the Act, 1994 and the Act, 1956. Surprisingly enough, the Senior Joint Commissioner, Commercial/Sales Tax, Corporate Division, issued a notice in form 55, dated September 15, 2009 under the West Bengal Sales Tax Rules, 1995, evincing his interest in levying tax on the sum of ₹ 2,89,45,873 which was earlier allowed as additional discount under section 2(31) and section 2(40) of the West Bengal Sales Tax Act, 1994. The stand of the petitioner was clearly explained by placing all the relevant documents including credit notes for ₹ 2,89,45,873. It is alleged that without appreciating the stand of the petitioner, the Senior Joint Commissioner ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved by the assessing authority as well as by the appellate authority, such finding cannot afterwards be modified or rectified by way of review, as there was no irregularity or illegality on the face of such order. Mr. Ganguli has referred to the case of Deva Metal Powders Pvt. Ltd. v. Commissioner, Trade Tax, U.P. reported in [2007] 10 VST 751 (SC); [2008] 51 STA 183, to vindicate his stand that the mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The plain meaning of the word 'apparent' is that it must be something which appears to be so ex facie and it is incapable of argument or debate. The prevalent system of allowing trade discount by way of credit notes having been allowed for decades together, such accepted norms cannot be sought to be rectified on the pretext of change of interpretation of law. It is submitted that since trade discount was accepted on the prevalent law expounded by the courts, the settled position cannot be modified or altered in view of different interpretation of law being made in the case of D.C.C. T., Corporate Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 245 of the West Bengal Sales Tax Rules, 1995, the plea of bar of limitation is not applicable. As defined in section 2(31) of the West Bengal Sales Tax Act, 1994, 'sale price' means the amount payable to a dealer as valuable consideration for the sale, other than that referred to in section 15, of any goods, less any sum allowed as cash discount according to ordinary trade practice or any sum charged as cess leviable under the West Bengal Transport Infrastructure Development Fund Act, 2002 (W.B. Act XXI of 2002), but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before, delivery thereof, other than the cost of freight or delivery or the cost of installation or interest when such cost or interest is separately charged. As defined in section 2(40) of the West Bengal Sales Tax Act 1994, 'turnover of sales' in relation to any period means the aggregate of the sale prices receivable by a dealer, or if a dealer so elects, actually received by the dealer, during such period after deducting therefrom- (a) the sale prices or the parts of sale prices, if any, in respect of sale during such period of goods speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onourable court has taken the view that trade discount is to be deducted from the catalogue price in accordance with the terms of the agreement and it is only thereafter that the consideration is to be fixed which is the sale price. In interpreting the provision of sale price and turnover of sales, as defined in section 2(31) and section 2(40) of the Act, 1994, the Tribunal in its judgment in RN-26 of 2003 (D.C.C.T., Corporate Division v. M.R.F. Ltd. [2008] 14 VST 124 (WBTT)) has held that trade discounts are to be deducted from the sale amount as trade discount does not form part of the sale price. If the listed price is realised from the purchaser and shown in the invoice or seller's account as sale price without any indication about such discount, subsequent adjustment of an amount against price of subsequent purchases cannot ordinarily qualify as trade discount. In rejecting the prayer for additional discount by way of credit notes, the Senior Joint Commissioner, Commercial Taxes, Corporate Division has rightly held that in view of full price being realised by the dealer from the purchaser, coupled with the fact that sales tax and surcharge had also been charged on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .' It is clear from the order passed by the Joint Commissioner that he exercised the revisional power in suo motu revision Case No. SMR/17/ CD/09-10. There is no reason to hold that a power of review had been exercised in view of a wrong section being quoted in the order. In his capacity as a superior authority, the Senior Joint Commissioner revised the order of the Assistant Commissioner. Such exercise of power was made in terms of the provisions of section 80, read with sub-rule (3) of rule 244 and rule 245 of the West Bengal Sales Tax Rules, 1995. The order of re-assessment passed on March 22, 2004 was revised on February 9, 2010. It is evident from the record itself that such power under section 80 of the West Bengal Sales Tax Act, 1994 read with rule 245 of the West Bengal Sales Tax Rules, 1995 had been exercised within the stipulated period of six years as prescribed in the proviso to rule 245 of the West Bengal Sales Tax Rules, 1995. The order of revision, therefore, cannot be called to be barred by limitation. The question of discount by way of credit notes was not dealt with in proper perspective by the assessing authority. The settled principle of trade discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of tax after the said tax was deposited. However at the time of assessment the credit notes were produced seeking deduction on account of tax. The assessing officer by his order dated June 30, 1999 accepted the said claim of deduction on account of credit notes with observation that there was no irregularity involving higher collection of tax is involved. However the claim for deduction on account of return of the goods for a sum of ₹ 2,97,012.50 was disallowed along with the aforesaid claim of deduction, a sum of ₹ 9,67,873 was also disallowed. The petitioner/assessee being aggrieved by the aforesaid portion of disallowance of the order dated June 30, 1999, preferred appeal under the old Act of 1994 and under the Act 1956 before the Deputy Commissioner of Commercial Taxes, Corporate Division. Both the appeals under section 9 of the Central Sales Tax Act, 1956 and section 79 of 1994 Act were disposed of by common judgment and order dated June 26, 2002, and thereby disallowance of the credit notes amounting to ₹ 2,97,102.50 was affirmed with the findings recorded therein. The appellate authority however set aside some of the findings of the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Kar, learned advocate appearing for the petitioner, reiterated the point taken before the appellate authority. He submitted on the question of limitation that under rule 244 of the West Bengal Sales Tax Rules, 1995 (hereinafter referred to rule 95) an authority can revise assessment order within a period of six years from the date of the assessment order. The original order of assessment was passed on June 30, 1999. Under this order trade discount by way of credit note was allowed to the extent of ₹ 2,89,45,873.50 paise out of which ₹ 2,74,90,912 was under the Sales Tax Act and ₹ 17,52,063 was under the Central Act. The petitioner herein preferred appeal against a portion of the said original order of assessment which does not relate to the trade discount but relate to some other claim. The appeal was allowed and the matter was remanded on limited point on some other ground, not on the point of trade discount. Truly there has been no appeal on the point of trade discount as it was decided finally on June 30, 1999. Following the remand order there has been order of reassessment dated March 22, 2004 and the said remand order clearly recorded that claim of all o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e form of credit note was admittedly considered in the reassessment order dated March 22, 2004. Therefore the period of limitation has to be calculated from the date of reassessment order not from the original assessment order. In support of his submission on the question of limitation he has referred to the decision of the Supreme Court in case of Deputy Commissioner of Commercial Taxes v. H.R. Sri Ramulu reported in [1977] 39 STC 177 (SC); [1977] 1 SCC 703 when revised assessment is made on remand pursuant to the appellate order the revisional power can be exercised to revise the reassessment order passed by the assessing officer hence the period of limitation from the date of passing of the assessment order. On merit he contends that factually trade discount was not made known to the purchaser at the time of sale. The invoices and sales account also do not reflect any trade discount at the time of final returns. The full price has been realized with tax and surcharge at the time of issuance of invoice. He submits once tax and surcharge has been realised, any discount if given to the assessee would result unjust enrichment as the assessee would claim return of tax deposit from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise of power is within the period of limitation. But before we conclude finally either way it has to be examined whether the issue involved herein, namely, disallowance or allowance of trade discount under the law was the subject-matter of the order of reassessment dated March 22, 2004 or not. To elucidate this aspect it has to be examined as contended by Mr. Kar the order of reassessment on remand dated March 22, 2004 does not relate to the issue of trade discount as this was not the subject-matter to be reassessed. According to him this issue of allowance of trade discount has been decided finally by the initial order of assessment in 1999, and appeal was preferred not in relation to the aforesaid issue. The appellate authority has remanded the matter for fresh hearing on the some other issues. Taking note of this contention we have seen the order of the first appellate authority dated June 26, 2002. We find by this order that the appellate authority recording the grounds taken in the appeal, has set aside the entire order of assessment, and remanded back to the file of the assessing officer for fresh assessment. We are of the view that when entire order is set aside nothing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of revising authority. Thus on remand the assessing officer by order dated March 22, 2004 has decided the matter afresh and after considering all contention did not alter the issue of trade discount. Therefore, we think that the assessing officer on remand has no doubt applied his mind while taking fresh decision and in the process did not recall earlier decision on the issue of trade discount. Thus we are unable to accept the contention of Mr. Kar that the aforesaid decision of the assessing officer on remand on the issue of trade discount can be said to be a revival of the earlier order dated June 30, 1999. Our observation would be clear from the recording of the assessing officer on reassessment. It records as follows: Original assessment order dated June 30, 1999 was set aside for fresh assessment. We thus find considerable force in the submission of Mr. Majumdar that the power of revision cannot and could not be exercised in relation to order dated June 30, 1999 as it no longer subsists for taking any action because by the appellate authority's order entire thing was set aside. We therefore hold without any difficulty that the suo motu power of revision was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Kerala reported in [2012] 49 VST 1 (SC) is distinguishable on fact that the Supreme Court in that case had the occasion to consider the provisions of the Kerala General Sales Tax Act and Rules. Unlike the WBST Act, Kerala Act and Rules provided for allowance of other discount. Section 2(31) is defined the sales price and section 2(xxvii) defines the turnover that recognizes discounts other than cash discount and provides that those other discounts too shall not be included in the turnover. Another decision of the honourable Supreme Court reported in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Advani Oerlikon (P.) Ltd. [1980] 45 STC 32 (SC); [1980] 1 SCC 360, is also of no help in this case. This judgment was considered by the learned Tribunal and also by this honourable court in M. R. F. Ltd. v. Assistant Commissioner, Commercial Taxes, Corporate Division WPTT No. 793 of 2006. We have already noted that the Division Bench of this court concluded that in so far as the provision of WBST Act is concerned the trade discount in the form of credit notes cannot be allowed when such trade discount had not been allowed to the purchaser, nor ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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