2015 (11) TMI 216 - HC - VAT and Sales Tax

Refund of sales tax - excess payment of tax - reduction in the purchase value from ₹ 682/- to ₹ 645/- per cylinder - Held that - In normal parlance, discount can be said to be a bargain in between purchaser and seller whereas the present case cannot be said to be a case of discount or bargain as the purchaser, on the basis of the expert committee report, has reduced the value on its own and voluntarily which was duly accepted/admitted by the assessee and not challenged anywhere. Therefore, in my view, it cannot be said to be a case of discount. Ld. counsel for the assessee has relied upon certain judgments, which are prima-facie dealing with the cases where the seller allowed discount to the purchaser and the courts, in such circumstances, came to the conclusion that, it being a discount, the discounted value is required to be adopted. I may consider a case where the purchaser accepts goods and after delivery is taken, it is noticed that the quality is not upto the mark and the goods needs to be returned back and after mutual discussion, some price variation is there in the shape of reduction of the value, then in my view, it cannot be said to be a case of reduction/discount as everything has happened after delivery which cannot be said to be price reduction or discount. In subsequent bills the amount was reduced by the purchaser on final settlement, then in that case, it was an inter-se dispute in between the assessee as well as the Oil Companies but in so far as the claim that sales tax was required to be paid on the lower value of ₹ 645/- per cylinder, in my view, cannot be said to be correct on the part of the assessee. - Decided against assessee.

Summary

Issues Involved:
1. Entitlement to rebate/refund of sales tax due to reduction in purchase price.
2. Interpretation of 'sale price' and 'turnover' under the Rajasthan Sales Tax Act, 1994.
3. Applicability of provisional pricing and subsequent price revision.
4. Relevance of discount or rebate in determining the sale price.
5. Comparison with similar cases and judgments under the Central Excise Act.

Detailed Analysis:

1. Entitlement to rebate/refund of sales tax due to reduction in purchase price:
The petitioner-assessee claimed that it paid sales tax on the price of Rs. 682 per cylinder based on the initial purchase order. When the price was later reduced to Rs. 645 per cylinder, the petitioner-assessee sought a rebate/refund of the sales tax paid on the higher amount. However, the Assessing Officer (AO) rejected this claim, stating that there was no provision under the Act for reducing the amount or claiming a tax rebate once the tax had been deposited in the government treasury.

2. Interpretation of 'sale price' and 'turnover' under the Rajasthan Sales Tax Act, 1994:
The petitioner-assessee argued that the definitions of 'sale' and 'turnover' under the Act supported their claim for a refund. They emphasized that 'sale price' means the amount paid or payable to a dealer for the sale, less any discount or rebate, and 'turnover' means the amount received or receivable. The petitioner contended that the terms 'payable' and 'receivable' should be interpreted to mean the actual amount paid by the purchaser and received by the assessee.

3. Applicability of provisional pricing and subsequent price revision:
The Tax Board upheld the Revenue's appeal, stating that the initial price of Rs. 682 per cylinder was provisional and later reduced based on a report by M/s Price Waterhouse Coopers. The Board concluded that the reduction in price could not be considered a rate difference relevant to the Sales Tax Department, as it was an internal arrangement between the assessee and the Oil Companies.

4. Relevance of discount or rebate in determining the sale price:
The petitioner-assessee alternatively argued that the price reduction could be considered a discount, which should be deducted from the sale price. However, the court found that the reduction was not in the nature of a discount or rebate but was a voluntary price adjustment by the Oil Companies based on an expert report. The court noted that discounts typically involve a bargain between the purchaser and seller, which was not the case here.

5. Comparison with similar cases and judgments under the Central Excise Act:
The petitioner-assessee cited several judgments, including those under the Central Excise Act, to support their claim. However, the court distinguished these cases, stating that they involved genuine discounts or rebates given at the time of sale or subsequently. The court found the case of MRF Ltd. Vs. Collector of Central Excise, Madras more applicable, where the Supreme Court held that subsequent price reductions do not affect the excise duty liability determined at the time of removal of goods from the factory gate.

Conclusion:
The court concluded that the petitioner-assessee was not entitled to a rebate/refund of sales tax based on the subsequent price reduction. The Tax Board's decision was upheld, and the revision petitions were dismissed with no order as to costs. The court emphasized that the price reduction was an internal arrangement between the assessee and the Oil Companies and did not constitute a discount or rebate under the Sales Tax Act.