2007 (4) TMI 629 - HC - VAT and Sales Tax

Summary

Issues involved: Assessment of tax liability on sale transactions involving reduction of sale consideration and return of goods.

Assessment of Sale to M/s. Munjal Showa Limited, Gurgaon:
The applicant sold a machine to M/s. Munjal Showa Limited, Gurgaon, and issued a credit note reducing the sale price by Rs. 14,29,900 due to operational issues. The authorities levied tax on the entire amount, but the applicant argued that the reduced price should be considered for tax. The court held that the credit note reduced the sale consideration and was not taxable, citing the Hindustan Sugar Mills Ltd. v. State of Rajasthan case. However, the tax collected on the reduced amount could be refunded u/s 29A(3) of the Act.

Assessment of Sale to M/s. Vengatachalam Engineering Works Private Limited, Salem:
Regarding the sale to M/s. Vengatachalam Engineering Works Private Limited, Salem, the applicant claimed that the machine was returned as the sale was not completed. The authorities contended that the sale was completed as the goods were delivered to the purchaser. The court noted that no evidence proved non-delivery to the purchaser and upheld the rejection of deduction as the goods were returned after six months, exceeding the limit u/s 8A(b) of the Central Act.

Conclusion:
The court allowed the revision in part, directing the Tribunal to issue an appropriate order u/s 11(8) of the Act.