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2016 (7) TMI 39 - GUJARAT HIGH COURT

2016 (7) TMI 39 - GUJARAT HIGH COURT - [2016] 93 VST 436 (Guj) - Valuation - reduction of discount given to customers on the sales finalized at the year end from the next year's turnover - assessment year 2007-08 - Since this event took place during the financial year 2008-09, the assessee claimed credit of such discounted sale price and the consequential reduced tax collected from the consumers in such year. - Commissioner was of the opinion that the benefit of discounted price could be granted .....

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ssessee had done and claimed benefit of reduced tax collected from the purchasers. This devise, in our opinion, was not prohibited by Section 8 of the VAT Act, reliance upon which has been made by the department. - In essence what the assessee did, was to reduce the total turnover of the assessment year 2008-09 to the extent its value after discount during the previous year had come down which would have a direct relation to the tax payable by the assessee. - No demand - Decided against the .....

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ent has filed this petition challenging the judgement of the Value Added Tax Tribunal dated 08.06.2015 by which, the Tribunal allowed the revision petition of the respondent-assessee. 3. Briefly stated the facts are that, the respondent is a registered dealer and is engaged in manufacture and sale of cement. For the assessment year 2007-08, the assessee had sold such goods to various customers. At the end of the year in the last quarter, the discount to be given to such customers on the sales wa .....

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sing Officer into suo motu revision. In such order, the Commissioner was of the opinion that the benefit of discounted price could be granted to the dealer only during the same year in which the event took place. Principally, his objection was, therefore, that for the sale transactions which took place in the year 2007-08 for which the credit notes were issued, the benefit of reduced tax can be granted only during such period and not during the subsequent year. He, therefore, disallowed the adju .....

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uch adjustment was not permissible. It is this judgement of the Tribunal which has been challenged in the present petition. 4. Having heard learned counsel for the parties and having perused the documents on record, we notice that in the impugned judgement, the Tribunal has observed that in the present case, the assessee had issued credit notes as a result of discount granted to the customers. The price of goods sold was finalized or revised or settled subsequently and, therefore, the credit not .....

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ars. 5. In background of such virtually undisputed facts, we may refer to the statutory provisions. Section 60 of the VAT Act pertains to invoices. As per sub section (1) of Section 60, a registered dealer who sales taxable goods to another registered dealer has to provide him at the time of sale, with a tax invoice containing such particulars as may be prescribed. Section 61 pertains to credit and debit notes and reads as under: 61. Credit and debit notes: Subject to the provisions of section 8 .....

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hown in the tax invoice as charged, the seller shall provide the purchaser with a debit note, containing such particulars as may be prescribed: [Provided that not more than one credit note, or as a case may be, debit note shall be issued for the amount in excess]. 6. In terms of Section 61 thus, subject to the provisions of Sections 8 and 60, where a tax invoice has been provided in terms of sub section (1) of Section 60 and the amount shown as tax charged in the tax invoice exceeds the actual t .....

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n Section 61. 7. In terms of Sections 60 and 61 of the VAT Act thus, the assessee was entitled to issue credit notes once the amount of tax shown as charged in the tax invoice exceeded the actual tax charged in respect of the sale concerned. This is precisely what the assessee had done and claimed benefit of reduced tax collected from the purchasers. This devise, in our opinion, was not prohibited by Section 8 of the VAT Act, reliance upon which has been made by the department. In fact, Section .....

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