TMI Blog2020 (2) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... . dated 11.7.2011 would require reconsideration by the respondent. The issue relating valuation is answered in favour of the Petitioner. Thus, the demand of tax on Trade Discount in the impugned orders are quashed to that extent - As far as the issue relating to rate of tax is concerned, the same is remitted back to the respondent to pass fresh order in the light of the clarification issued by the Authority for Clarification and Advance Ruling vide its order dated 25.10.2016. Appeal allowed by way of remand. - W.P.Nos.37776 And 37777 of 2015 And M.P.Nos.1 & 1 of 2015 - - - Dated:- 20-1-2020 - Mr. Justice C. Saravanan For the Petitioner : Mr. N. Sriprakash Mr. N. Prasad For the Respondent : Mr. Mohammed Shaffiq Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Difference Proposed to be levied ₹ 1,97,559.00 In respect of Assessment Year 2010-11: (W.P. No. 3777 of 2015) (a) Sales of Used car ₹ 3,96,03,650.00 During the year they have sold used car and collected tax @ 4%. As they are dealer in automobiles, they ought to have collected tax @ 12.5%. Hence it is proposed to assess this Turnover of ₹ 3,96,03,650.00 @ 12.5%. Tax @ 12.5% ₹ 49, 50, 456.00 Tax @ 4% already Collected ₹ 15, 84, 146.00 Tax Difference Proposed to be levied ₹ 33, 66, 310.00 (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r notification vide G.O.Ms.No.36 CT R (B2) dated 01.04.2008 with effect from 01.04.2008 which was made applicable to any dealer other than the dealer in automobiles including commercial vehicles, two wheelers and three wheelers, on the sale of used motor vehicles which have suffered tax already either under erstwhile Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) or the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) and registered within the state of Tamil Nadu under the Motor Vehicles Act, 1988 (Central Act 59 of 1988), subject to the condition that the dealer shall not be eligible to avail Input Tax Credit , the Respondent has denied the benefit of the first mentioned notification to the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) and registered within the state of Tamil Nadu under the Motor Vehicles act, 1988 (Central Act 59 of 1988), subject to the condition that the dealer shall not be eligible to avail Input Tax Credit. In order to understand the position stated in both the Government Orders. A combined reading is essential to understand the different and distinct circumstances under which the sale of cars by a dealer in general and sale of used cars which are registered within the state of Tamil Nadu under the Motor Vehicles Act, 1988 is dealt as liable to tax, when the Government Order first cited is general in nature and the Second Government Order is very specific relating the sale of used cars w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CT R (B2) Dept, dated 11.07.2011. 9. The learned counsel for the Petitioner submits that impugned order to that extent can be set aside and the case may be remitted back to the Respondent to pass a fresh order considering the above clarification issued by the Authority for Clarification and Advance Ruling vide clarification dated 25.10.2016. 10. As far as Trade Discount is concerned, the learned counsel for the petitioner submits that the same is not part of the taxable turnover of the cars sold by the petitioner. It is an incentive given by the manufacturer to the petitioner based on the performance of the petitioner on the sale of car manufactured by the said manufacturer. He further submits the said amount cannot form part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of the motor cars sold by the Petitioner to the retail buyer at its show rooms. 13. I therefore find that there is no basis on which the aforesaid amount of ₹ 3,48,08,441/- can be taxed as taxable turn over of the Petitioner. The two transactions are independent transactions. One transaction is between the manufacturer who is also a dealer who had passed on incentives to the Petitioner and the second transaction between the Petitioner and its buyers of its retail show room to whom the Petitioner has sold the cars. As these two are independent transactions there is no basis on which the trade discount passed to it by the manufacturer(dealer) to the Petitioner can be added in to the taxable turn over of the Petitioner for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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