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2016 (12) TMI 6 - RAJASTHAN HIGH COURT

2016 (12) TMI 6 - RAJASTHAN HIGH COURT - TMI - Replacement of defective parts during warranty period - whether amounting to sales transaction? - liable to VAT or sales tax? - Held that: - Both the counsels for the Revenue as well as the assessees after arguing for some time contended during the Course of hearing, that all these petitions be disposed off by this Court, to be governed in the light of the judgment pending before Apex Court in the case of M/s Marudhara Motors [2009 (3) TMI 956 - RAJ .....

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civil appeal in M/s Marudhara Motors is allowed by the Apex Court in favour of the revenue then these revision petitions would be allowed automatically. However, if the Judgment of this court in M/s Marudhara Motors is upheld by the Apex Court, then all these petitions would stand automatically dismissed. - It would be appropriate to dispose off the present petitions to say and to hold that the outcome of these petitions would be governed finally by the outcome of the SLP pending before th .....

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time to time. Since the same and identical controversy raised by the revenue in all the instant petitions is the same relating to the replacement of the parts to the customers of spare parts as to whether it is sale or not. Being identical all the petitions are decided by this common order. 2. All the respondent/assessees are dealers of various automobiles companies and their claim was that during the warranty period they have to replace defective parts and as per the agreement with the manufac .....

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to provide support during warranty period. Though the respondent/dealer issues its own invoices for sale of car, collecting local sales tax but the price cannot exceed maximum price prescribed by the manufacturer. However, under the warranty, if some parts have gone defective, such parts have to be replaced, free of cost to the customers of the respondent and the respondent is duty bound to replace the parts free of cost and later on, raises credit note with the manufacturer. It was claimed tha .....

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Sales Tax. 4. However, on an appeal the Deputy Commissioner (Appeals) taking into consideration the judgment rendered by this Court in the case of M/s Marudhara Motors (2009)-23 Tax Up-date-249 (Raj.) where the judgment of Apex Court in the case of Mohd. Ekram Khan & Sons (supra) was distinguished, allowed the appeal and held that replacement cannot be treated as sale. On a further appeal by the revenue, before Rajasthan Tax Board also resulted into dismissal of the appeal. 5. Ld. Counsel f .....

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15 (4) TMI 777 have squarely followed the judgment of Mohd. Ekram Khan & Sons (supra). He also pointed that even the High Court of Gujarat in Kataria Automobiles (P.) Ltd. (supra) has distinguished the Judgment of this court in M/s Marudhara Motors (supra). In the alternative he contended that the judgment of this Court in the case of M/s Marudhara Motors (supra) has been challenged by the Revenue before the Apex Court and SLP has been admitted by the Apex Court. 6. Counsel for the revenue a .....

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icles. They contended that the nature of business remains the same as that of M/s Marudhara Motors (supra) and contended that the judgment of Mohd. Ekram Khan & Sons (supra) has rightly been distinguished by this Court by a detailed order and is required to be followed. Learned counsel for the Assessees thus contended that the petitions deserves to be dismissed. 8. I have considered the arguments advanced by the counsel of the parties and admittedly the judgment of the Apex Court in the case .....

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