1994 (4) TMI 357 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Deduction of Rs. 6,505.75 for goods cancelled by DGS&D.
2. Trade discount rate of 49% to M/s. Auto Marketing Corporation.
3. Deduction of Rs. 17,325 under section 5(2)(a)(ii) of the Act of 1941 related to declaration form No. D-2/027524.
4. Deduction of Rs. 20,625.30 under section 5(2)(a)(ii) of the Act of 1941.
5. Legality of the seizure and retention of books of accounts and documents.

Detailed Analysis:

1. Deduction of Rs. 6,505.75 for Goods Cancelled by DGS&D:
The applicant argued that the goods valued at Rs. 6,505.75 were delivered late, leading to cancellation by DGS&D and no payment was made for these goods, thus this amount should be deducted from the turnover. The Tribunal noted that the sum of Rs. 6,505.75 never became payable to the applicant as part of the "sale price" since there was no transfer of property in the goods. The Tribunal allowed the applicant's claim for deduction of the entire amount of Rs. 6,505.75 from the turnover.

2. Trade Discount Rate of 49% to M/s. Auto Marketing Corporation:
The applicant claimed a trade discount of 49% based on an agreement with M/s. Auto Marketing Corporation. The Commercial Tax Officer allowed a 10% discount, which the Assistant Commissioner increased to 30%. The Tribunal found that the agreement for a 49% discount was not produced at any stage, and the Assistant Commissioner's allowance of a 30% discount was based on a scrutiny of facts and materials. The Tribunal upheld the 30% discount, finding no basis for the applicant's claim of a 49% discount.

3. Deduction of Rs. 17,325 under Section 5(2)(a)(ii) Related to Declaration Form No. D-2/027524:
The applicant claimed a deduction of Rs. 17,325 based on a declaration form from M/s. Industrial Mineral Syndicate. The respondents argued that the firm was non-existent, and the transaction was not genuine. The Tribunal noted that the disallowance was based on the non-existence of the firm and the lack of evidence regarding the mode and date of delivery. The Tribunal upheld the disallowance, finding no illegality in the appreciation of facts and evidence by the authorities.

4. Deduction of Rs. 20,625.30 under Section 5(2)(a)(ii):
The applicant's claim for a deduction of Rs. 20,625.30 was disallowed due to the absence of a declaration form. The Tribunal found that the disallowance was based on the appreciation of facts and evidence, which did not suffer from any illegality. The Tribunal upheld the disallowance.

5. Legality of the Seizure and Retention of Books of Accounts and Documents:
The applicant challenged the legality of the seizure and retention of books of accounts and documents beyond the statutory period without being given an opportunity to be heard. The Tribunal noted that the retention order was not communicated to the applicant, making it bad in law. The Tribunal ordered the return of the seized documents and books of accounts to the applicant after authentication of xerox copies by the applicant or his representative.

Conclusion:
The Tribunal allowed the deduction of Rs. 6,505.75 from the turnover, upheld the 30% trade discount, and maintained the disallowance of Rs. 17,325 and Rs. 20,625.30. The Tribunal also ordered the return of the seized documents and books of accounts to the applicant. The revised gross turnover arrived at by the Assistant Commissioner was to be reduced by Rs. 6,232.50, and the impugned orders were modified accordingly. No costs were awarded.