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TMI Blog2013 (4) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... rds reimbursement of the cost of the parts so supplied to those persons. The assessee is an authorized dealer of M/s. Ford India Ltd., who is the manufacturer of different models of Ford four-wheeler motor vehicles, having its principal place of business and registered office in Chengalpet, Tamil Nadu. The said manufacturer sold Ford model four-wheeler motor vehicles to the assessee in the course of inter-State trade or commerce against C forms. The assessee is also a registered dealer under the provisions of the Karnataka Sales Tax Act. In turn, the assessee sold the cars so purchased from the manufacturers to local customers at sale price which includes cost of warranty. The warranty was meant to provide free replacement of parts to cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Karnataka Sales Tax Act asking the assessee to show cause why it should not be treated as a sale price and taxable turnover in respect of which, he had claimed deductions. After hearing the assessee, orders were passed allowing the revision petition and reviewing the sales tax for the spare parts supplied during the warranty period. Aggrieved by the said order, the assessee preferred an appeal to the Karnataka Appellate Tribunal. The Tribunal after considering the statutory provisions, judgment of the apex court and also the judgment of the Rajasthan High Court held that there was no "sale" involved within the definition under section 2(1)(t) of the KST Act in the transactions of free supply of parts by the assessee to customers c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court is that the assessee had received the payment of the price for the parts supplied to customers. That being so, the transaction was subject to levy of tax as has been rightly held by the High Court. The decisions in Geo Motor's case [2001] 122 STC 285 (Ker) and Prem Motor's case [1986] 61 STC 244 (MP), stand overruled." Following the said judgment, a Division Bench of this court in the case of Deputy Commissioner of Commercial Taxes (Spl.) v. Prerana Motors (P) Ltd. decided on October 19, 2005 in STRP 69 of 2004 held that the supply of parts to the customers against the credit note of the manufacturer is liable to tax under the Act. However, the High Court of Rajasthan in the case of Commercial Tax Officer (Anti-Evasion), Jodh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own by the apex court in Mohd. Ekram Khan's case [2004] 136 STC 515 (SC) the consideration paid by the manufacturer to the assessee by way of a credit note represents the sale price of the spare parts which are replaced and is liable to tax. In that view of the matter, the impugned order passed by the Tribunal is liable to be set aside. Hence, we pass the following order: (a) Revision is allowed. (b) The impugned order passed by the Tribunal is hereby set aside. (c) The order passed by the revisional authority is restored to file in its original. In STA No. 30 of 2010, the assessee has challenged the order passed by the Additional Commissioner of Commercial Taxes under section 22A(1) of the KST Act, 1957 levying sales tax on the spa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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