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TMI Blog2015 (11) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... companies placed purchase order of 14.2 KG LPG Cylinders to the petitioner-assessee. M/s. Indian Oil Corporation Limited placed purchase order for purchase of 14.2 KG Cylinders @ Rs. 682/- per cylinder and it was stated that the pricing formula is under review by the Government and the final prices applicable after 01/07/1999 will be only as per approval of Ministry of Petroleum and Natural Gases (for short"MOP & NG"). Similar purchase order was placed by the other two companies namely; M/s. Bharat Petroleum Corporation Limited and M/s Hindustan Petroleum Corporation Limited. A letter came to be issued by M/s Indian Oil Corporation Limited on 31/10/2000 to the petitionerassessee conveying that the Industry has undertaken a study to review the existing cylinder price with the assistance of M/s Price Waterhouse Coopers. Accordingly, the price of 14.2 Kg LPG Cylinder was maintained provisionally with effect from 01/07/1999 at Rs. 645/- per 14.2 Kg cylinder and that M/s Price Waterhouse Coopers have already submitted a draft report to Industry on the price revision and accordingly it was conveyed that pending finalization of the report and the short time available to recover the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied with the relief having been granted by the DC(A), the respondent-Revenue preferred four appeals, as aforesaid, before the Tax Board. The Tax Board, after analyzing the material on record, allowed appeal of the respondent-Revenue by holding that it could not have been said to be a rate difference and as the agreement/arrangement, if any, was in between the petitioner-assessee and the Oil Companies, as aforesaid, the Sales Tax Department has no concern or connection with the internal arrangement and that the reduction of tax on facts is not applicable. 7. Ld. counsel for the petitioner-assessee contended that the definition of 'sale' is quite clear under the Act and the 'sale price' would mean the amount paid or payable to a dealer for the sale less any sum allowed by way of any kind of discount or rebate according to the practice normally prevailing in the trade. He also laid stress on the definition of 'turnover' as given under the Act to mean the amount received or receivable and laid stress on the word 'payable' and 'receivable' and contended that 'payable' and 'receivable' would mean the actual amount as actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Tax Board, after elaborate discussion, has come to right conclusion. He further contended that it was in between the assessee and the Oil Companies and the Revenue was not at all in the picture in between the agreements and he contended that it was integral/internal arrangement and if the assessee had any grievance of reduction of the taxes, then it could have claimed the same from the Oil Companies rather than claiming refund. He also relied upon Section 2(39) under the RST Act, 1994 which gives definition of 'sale price' and contended that the word used is 'the goods at the time or before the delivery thereof' and laid stress that once the delivery was given, the voluntary effect by the petitioner himself proved that he was aware of the said rate being final. He contended that it cannot be said to be a case of discount at all as it is neither in the nature of discount nor rebate to the purchaser i.e. the Oil Companies rather the Oil Companies had reduced the price prevailing in the market and thus the alternative submission of discount is wholly unsustainable. He also relied upon the judgment rendered in the case of MRF Ltd. Vs. Collector of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THERN REGION: 73380 EASTERN REGION: 0 WESTERN REGION: 0 SOUTHERN REGION: 0 ASSAM OIL DIVISION: 0 2) For the purpose of pre-escalation quantity, pruning and LD, if any applicable, the supply schedule will be 30%, 30%, 20% and 20% of the order quantity during May 2000, June 2000, July 2000 and August 2000 respectively. The date of despatch/excise gatepass shall be taken as date of supply. 3) You can charge a provisional price of Rs. 682.00 for 14.2 Kg cylinders. Pricing formula is under review by the Government and the final prices applicable after 01.07.99 will be only as per approval of MOP & NG. 4) In case you choose transportation by road, the responsibility of transportation and property in goods shall lie with the seller and the payment shall be released on receipt of material at plant/site and only the least freight applicable shall be payable limited to Notional Rail Freight. 5) This order is subject to the enclosed General conditions and the purchase agreement for 2000-2001. Receipt of this PO may please be acknowledged. Commencement of supply against this PO shall be taken as the acceptance of the same. Thanking you, Yours faithfully, For INDIAN OIL CORPORATION ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basic price". It would be appropriate to have a look to the definition of the 'sale price' and 'turnover' as given under the CST and RST Act. 14. Section 2(h) of the Central Sales Tax Act, 1956 defines 'sale price' as under:- "2(h) "sale price" means the amount payable to a dealer as consideration 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 charged for anything done by the dealer in respect of the goods at the time of 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: [Provided that in the case of a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, the sale price of such goods shall be determined in the prescribed manner by making such deduction from the total consideration for the works contract as may be prescribed and such price shall be deemed to be the sale price for the purpose of this clause;]" 14.1 Section 2(39) of Rajasthan Sales Tax Act, 1994 , defines 'sale price' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Board, after going into the letters issued by the Oil Companies, which have been reproduced herein above, the variation in the price initially at Rs. 682/- per cylinder, which too was provisional and later on at Rs. 645/- per cylinder on the basis of the expert committee report of M/s Price Waterhouse Coopers, cannot be said to be price reduction or discount as it is not in the nature of discount as contended by counsel for the assessee. It is true that on the basis of the purchase order dt. 04/05/2000 wherein rate of Rs. 682/- per cylinder was quoted, the assessee may have supplied goods @ Rs. 682/- per cylinder which as per the understanding can be said to be final at that point of time when the delivery was required to be given by the assessee and the assessee also, in fact, delivered goods @ Rs. 682/-, so also received sale consideration @ Rs. 682/- per cylinder. 17. In normal parlance, discount can be said to be a bargain in between purchaser and seller whereas the present case cannot be said to be a case of discount or bargain as the purchaser, on the basis of the expert committee report, has reduced the value on its own and voluntarily which was duly accepted/admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the case of discount which was not initially given but the discount was given subsequently at the end of the year and it was observed that it does not make any difference, if the discount was given at the time of delivery/issuance of bill or subsequently, at the end of the year when the accounts were settled and in view of the aforesaid facts, the claim of the Revenue was dismissed and the claim of the assessee was upheld. This judgment was also considering about discount and therefore, inapplicable on the facts of the instant case. 20. The judgment, relied upon by counsel for the assessee in the case of Bojaraj Textile Mills Ld. Vs. State of Tamil Nadu (supra), the Madras High Court was considering a case relating to manufacturing defects wherein there was a contract fixing the price @ Rs. 65/- per kg. but on account of manufacturing defect, the seller granted a quality reduction of Rs. 14/- per kg. which was the rate mutually agreed and the original contract was rescinded so far as the price was concerned and a new contract was substituted and it was held that the sale price had to be taken at a figure after considering the new rate contracted in the light of the manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade discount is given. Hence, a person may not be able to clearly prove as to why the special discount was given. But if there has been a consistent practice of giving special discount, that has to be accepted by the assessing authority." Therefore, this case is also inapplicable as it related to a discount only. 24. The Hon'ble Apex Court in the case of State of Rajasthan and anr. Vs. Rajasthan Chemist Association (supra), relied upon by counsel for the assessee, was considering a case of levy of tax on sale of goods as to whether it was to be on a completed sale or not, is entirely on a different proposition and is inapplicable. The other judgments, relied upon by counsel for the assessee are also inapplicable and distinguishable. 25. Ld. Counsel for the assessee stressed that under the Central Excise Act of this very transaction, the Commissioner (Appeals) in identical circumstances, had reduced the burden of incidence and refunded the additional excise duty which was upheld by the CESTAT Bench, New Delhi in the case of Commissioner of Central Excise, Jaipur Vs. Universal Cylinders Ltd. (supra) and the SLP was also dismissed by the Hon'ble Apex Court in the case repor ..... 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