TMI Blog2017 (2) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of assessment under the Act. This provision according to me cannot be extended to the assessment of turnover for the purpose of payment of tax. Of course, it could be said that there is some ambiguity to the provision. But in so far as the liability to pay tax is on the turnover and discount given is part of the turnover, I do not think that a different view is possible to be taken in the matter. Petition dismissed - decided against petitioner. - W.P. (C) No. 40152 of 2016 - - - Dated:- 7-2-2017 - A.M. SHAFFIQUE, J. FOR THE PETITIONER : ADVS.SRI.K.SRIKUMAR (SR.), SRI.K.J.CHERRI BABU, SRI.K.MANOJ CHANDRAN, SRI.P.R.AJITHKUMAR, SRI.S.A.MANSOOR (PATTANAM), KUM.ANAGHA LAKSHMY RAMAN FOR THE RESPONDENT : SR GOVERNMENT PLEADER SRI.C.K.GOVIND JUDGMENT This writ petition is filed challenging Exts.P5 and P5(a) assessment orders under KVAT Act, 2003 for the assessment years 2009-10 and 2010-11 completed under Section 25(1) of the Act. Though the impugned orders are appealable, according to the petitioner, the matter requires adjudication by this Court on account of a legal issue involved in the matter. 2. Petitioner is engaged in the trading of cement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t without any basis and thereafter to levy tax on such amount is illegal. It is contended that the discount allowed on sale price is a normal rate practice which is an item specially excluded from sale price and purchase price by definition given in the statute. Levy of tax on discount received in credit note is further forbidden under Section 11(3) of the Act on satisfaction of certain conditions which according to the petitioner, they have fully complied. In other words, the contention is that the discount received in credit note falls outside the scope of levy contemplated under the KVAT Act. On these allegations petitioner while impugning Exts.P5 and P5(a) assessments orders sought for a declaration that the discount received by the petitioner from its suppliers through credit notes will not form part of the taxable turn over especially when the turnover of discount suffered tax in the hands of the seller and the action to levy tax on discount received through credit notes is without legal sanction. 5. Heard the learned senior counsel appearing for the petitioner and the learned special Government Pleader appearing on behalf of the State. 6. Perusal of Exts.P5 and P5(a) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower than the purchase price, will require to be accounted for in the turnover, has already been approved by this Court in Cement House v. State of Kerala [(2010) 18 KTR 329 (Ker)]. The relevant portion of the judgment that states the law is as under: xxxx xxxx xxx It is obvious from the above that the purpose of the Explanation is to levy tax on the actual sale price irrespective of whether it is received by the dealer at the time of sale of goods or from the purchaser itself. In other words, any amount received by a dealer by way of consideration for sale of goods whether it is received from the purchaser or not is assessable as turnover in respect of the goods sold. The question whether sale is at below the purchase price is a matter to be decided not based on purchase price accounted by the dealer or the amount shown in the invoice, but the actual purchase price which certainly involves freight and handling charges paid by the dealer for the goods purchased. In this case, the clear finding of the lower authorities including the Tribunal is that in some cases the sale price is below the purchase price seen in the purchase invoice. So far as other sale, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady availed of or on account of reimbursement of any expenses incurred by the dealer shall not be reckoned for the purpose of assessment under this Act. 9. He also places reliance upon the judgment in WP(C) No. 27088/14 and connected cases wherein a learned Single Judge of this Court had occasion to consider the question with regard to availment of input tax credit by dealers in regard to the tax paid by them at the time of purchase of goods from their suppliers. An incidental question had also arisen for consideration as to whether the amount offered by way of discount through credit notes issued by the supplier of the goods at a point in time subsequent to the sale of goods to the petitioners can be added as sales turnover of the petitioners by invoking provisions of Explanation VII to the definition of turnover under Section 2(lii) of the KVAT Act. The learned Single Judge observed that issues in the writ petitions have to be considered in the light of Section 11 of the KVAT Act read with Section 2(lii). It was thereafter held that three factual situations may arise and the course of action to be adopted by the assessing authority would vary based on the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore the matter requires a fresh consideration. The learned Government Pleader on the other hand submits that the 5th proviso to Section 11(3) has no relevance to the factual aspects involved in the matter especially in the light of two Division Bench judgments which covers the field. Further the judgment in WP(C) No. 27088/14 and connected cases has no bearing to the factual aspects involved in the matter. 11. The short question therefore to be considered is whether 5th proviso to Section 11(3) have any bearing on the factual issues arising in the case. 12. Section 11 relates to providing input tax credit to a registered dealer. Section 11(1) reads as under:- 11. Input Tax Credit (1) Subject to the other provisions of this Section, any registered dealer, liable to tax under sub-section (1) of section 6, shall be eligible for input tax credit. 13. Sub section (2) of section 11 relates to the manner and procedure in which the eligibility of input tax credit is allowed. Section 11(3) indicates that the input tax credit shall be allowed to a registered dealer in respect of a return period against the output tax payable by him for such period and the dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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