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Arvind Garments Versus Commissioner of Commercial Taxes, Andhra Pradesh, Nampally, Hyderabad

2015 (3) TMI 1155 - ANDHRA PRADESH HIGH COURT

Seeking directions for re-opening of case - Entitlement for seeking deduction - In respect of sales returns in the relevant assessment year 1997-98 in which the sales of the returned goods had taken place despite the fact that the assessment for that year 1997-98 is completed - Exemption claimed in succeeding year instead of in the relevant year after satisfying the necessary conditions - Held that:- deduction should be made only from the turnover for the assessment year 1997-98 provided the oth .....

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No. 24 of 2004 - Dated:- 18-3-2015 - K.C. Bhanu and M.Seetharama Murti, JJ. For the Appellant : S. Dwarakanath For the Respondent : S. Suri Babu, Special Standing Counsel for Commercial Taxes (AP) JUDGMENT This appeal under section 23(1) of the Andhra Pradesh General Sales Tax Act, 1957 ("the Act", for short) read with rule 41 of the Rules under the said Act by the appellant/dealer is directed against the orders dated March 24, 2004 of the Commissioner of Commercial Taxes in CCT's. .....

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of the orders dated November 28, 2000 of the CTO, the appellant had preferred an appeal before the Appellate Deputy Commissioner (CT), Panjagutta (for brevity 'the ADC') disputing the tax liability on the turnover of ₹ 1,66,01,301 relating to sales returns. Admittedly, the goods returned related to the sale transactions affected during the preceding year of assessment, viz., 1997- 98. The appellant did not claim exemption on the said turnover towards sales returns in the appropria .....

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e ground that the sale transactions related to the preceding assessment year, but, not to the current assessment year 1998-99. However, the CTO did not reopen the assessment for the year 1997-98 by following the provision of rule 50 of the Act and had not extended the benefit of exemption. As such, the ADC, while allowing the appellant's appeal, had directed the CTO to reopen the assessment for the year 1997- 98 and grant the necessary relief to the extent of the aforementioned disputed turn .....

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the aggrieved appellant/dealer is before this court." 4. Now the only point for determination is: "Whether the appellant/dealer is entitled to seek deduction in respect of sales returns in the relevant assessment year 1997-98 in which the sales of the returned goods had taken place despite the fact that the assessment for that year 1997-98 is completed ?" 5. The learned counsel for the appellant would contend as follows: "By a bona fide mistake and for the reasons that the go .....

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sary entries were also made in the accounts of the assessee; and, the claim was also made within the statutory time. As all the conditions were satisfied, the turnover related to the sales returns goods is deductible from the total turnover of the appellant related to the year 1997-98 as the goods were actually sold in that year. The appeal may be allowed." 6. On the other hand, the learned Special Standing Counsel would contend that the conditions required for claiming the benefit are not .....

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he facts and the submissions. 8. The facts are not in dispute. The sales related to the assessment year 1997-98 to an extent of ₹ 1,66,01,301 were not accepted by the purchasers of the appellant. The appellant, therefore, ought to have claimed the relief against the returned sales turnovers in that assessment year 1997- 98. Under a bona fide impression and as the rejection or sales returns had taken place in the year 1998-99, the appellant had claimed the relief in the said year, which is .....

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ssessment for the year 1997-98 and extend the benefit to the appellant/dealer. Therefore, the ADC while allowing the appeal of the appellant had directed the CTO to reopen the assessment for the year 1997-98 and to give the relief, if upon the evidence produced, the appellant is entitled to such a relief. The Commissioner, having exercised the suo motu powers of revision, had set aside the said orders of the ADC. 9. In the decision in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Tax .....

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further appeal was dismissed by the Appellate Tribunal. The revision preferred before the High Court of Kerala was also dismissed". In the above stated factual background, the Supreme Court had held as follows (pages 53 and 54 in 53 STC): "The two important conditions which have to be satisfied for claiming the deduction under rule 9(b)(i) are that the goods in question must have been returned within three months from the date of delivery and that necessary entries are made in the acco .....

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ver, need not present much difficulty as an assessee in that position can always file a revised return and claim the deduction or even if assessment is completed, demand adjustment or refund by preferring the claim in time. The learned counsel for the Department states that such an adjustment or refund can be claimed by an assessee. . . . We are, however, of the view that even in the absence of such an amendment, the deduction in respect of 'sales return' has to be allowed in the assessm .....

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tal turnover of that assessment year The above decision was rendered as per the Kerala General Sales Tax Rules, 1963, which are applicable to the facts of that case. In the case on hand, goods of the value of ₹ 1,66,01,301 were brought to tax after including their turnover in the total turnover relating to the assessment year 1997-98. Subsequently, assessment for the succeeding year 1998-99 was taken up. In that assessment year the appellant had claimed that the said value of the returned .....

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ed in clauses (a) to (l) shall, subject to the conditions specified therein, be deducted from the turnover of a dealer- (a) . . . (b) (i) all amounts allowed to purchasers in respect of goods returned by them to the dealer when the goods are taxable on sales provided that the goods were returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made; (ii) a .....

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riod of six months from the date on which the goods sold have been received or the goods purchased have been returned as the case may be. The claim for deduction should also satisfy the requirement of the rule 50(4) of the Rules, which reads as follows: "Any assessing authority may at any time within one year from the date of service of an assessment order passed by him, revise the order, in respect of the claim for deduction on account of returned goods, referred to in clause (b) of rule 6 .....

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