1968 (7) TMI 63 - HC - VAT and Sales Tax

Summary

Issues:
1. Revision of orders by Deputy Commissioner under Kerala General Sales Tax Act, 1963.
2. Claim for deduction of trade discount from gross turnover.
3. Applicability of deduction rules under Central Sales Tax Act, 1956.

Analysis:

Issue 1: Revision of orders by Deputy Commissioner under Kerala General Sales Tax Act, 1963
The Deputy Commissioner filed petitions to revise orders of the Sales Tax Appellate Tribunal under section 41(1) of the Kerala General Sales Tax Act, 1963. The petitioner disallowed the respondent's claim for deduction of trade discount from gross turnover, leading to the revision of orders by the Deputy Commissioner. The revised orders were passed within the prescribed period under section 15(3) of the Act. However, the petitioner's orders were challenged as being beyond the prescribed period under rule 33(1) of the General Sales Tax Rules, 1950.

Issue 2: Claim for deduction of trade discount from gross turnover
The respondent claimed deduction of trade discount from its gross turnover in determining the taxable turnover, which was allowed by the Sales Tax Officer but disallowed by the Deputy Commissioner. The petitioner contended that trade discount was not deductible under the Central Sales Tax Act, 1956, as only cash discount was permissible. The respondent argued that the deduction claimed fell under rule 7(1)(a) of the Rules, allowing all amounts as discount in accordance with regular practice or terms of a contract. The Court held that deductions allowed under State law for determining net turnover were also applicable in determining taxable turnover under the Central Sales Tax Act, 1956.

Issue 3: Applicability of deduction rules under Central Sales Tax Act, 1956
The Court referred to previous decisions and the Supreme Court's interpretation of the Central Sales Tax Act. It was noted that exemptions and deductions under State law applied to the assessment of tax under the Central Act. The Court disagreed with the Madras High Court's interpretation regarding the amendment of section 15 of the Central Sales Tax Act, holding that all deductions allowed under State law for determining net turnover were also deductible in determining taxable turnover under the Central Act.

In conclusion, the revision petitions were dismissed, and it was held that deductions allowed under State law for determining net turnover were liable to deduction in determining taxable turnover under the Central Sales Tax Act, 1956.