TMI Blog2011 (2) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... ation treating this as only "incentive" and not as "trade discount". The assessing officer has tried to distinguish and imposed tax on the total turnover on the basis of the invoices issued without taking into consideration the discount extended in the sale transactions, which is usually permissible and it is also in vogue in the sale of goods. In the circumstances, the impugned order passed by the assessing officer at annexure L is quashed - W.P. Nos. 31315 - 31350 - - - Dated:- 4-2-2011 - HULUVADI G. RAMESH J. N. Venkataraman, Senior Advocate, M/s. Harish Co. for the petitioner K.M. Shivayogiswamy, High Court Government Pleader, for the respondents ORDER The petitioner is before this court assailing the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt unless the discount is separately shown in the tax invoice and the price collected and discount allowed. Of course, the learned counsel for the petitioner referring to the provisions of the KVATAct and rule 31 of the KVATRules has submitted that, if any value of the sale is altered in the tax invoice whether due to discount or otherwise, it is subject to the provisions of section 30 of the Act, the registered dealer has to give the buyer a credit/debit note, also referring to rule 3(2)(c) of the KVATRules, 2005 as to the definition of taxable turnover , it is submitted that the bill of sale issued in respect of the sales giving such discount does not amount to discount and the account is shown only when the purchaser had paid the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enter into the composition of the sale price, but exists apart from and outside it and prior to it. It is immaterial that the definition of 'sale price' in section 2(h) of the Act does not expressly provide for the deduction of trade discount from the sale price. Indeed, having regard to the circumstance that the sale price is arrived at after deducting the trade discount, no question arises of deducting from the sale price any sum by way of trade discount. The Division Bench of this court in STRP No. 117 of 2008 disposed of on February 16, 2010 (State of Karnataka v. Reliance Industries Ltd.) referring to rule 3(2)(c) of the Rules has observed that rule 3(2)(c) of the Act pertains to the discounts that can be allowed in terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of inter-State trade or commerce and export out of the territory of India and sales in the course of import into the territory of India. (b) The value of all goods transferred or dispatched outside the State otherwise than by way of sale. (c) All amounts allowed as discount. In the impugned order passed by the assessing officer as to the discounts extended by the dealer, it is opined that the discount provided after the issue of tax invoice would not reduce the sale price but it is regarded as incentive as the discounts like quantity discounts , of take discounts , prompt discounts are connected to the quantities, targets of performance and business promotions, etc., and not to sale price . Further, the assessing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods. In the circumstances, the impugned order passed by the assessing officer at annexure L is quashed. However, to assess properly taking into consideration what is the discount allowed in each of the cases based on the account furnished, it is for the assessing officer to restrict calculation of the taxable turnover based on the discounts on the sale of the goods and to calculate the actual tax to be paid. This exercise shall be done within one month from the date of receipt of copy of this order. In this regard, the respondent-authority to seek assistance of the petitioner to get any clarification if needed, in arriving at a conclusion. However, in the event, the amount is deposited, 50 per cent of the total amount be refunded wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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